16. Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.
Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above? (A) Although it sells all of the telephones that it produces, Mammoth Industriesâ€™ share of all telephone sales has declined over the last year.
This does not weaken the argument. In fact, Mammoth sold all of its phones. By increasing production it will in all likelihood sell the extra phones. (B) Mammoth Industriesâ€™ average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
Not quite sure how this relates to the argument. Telephones awaiting shipment and telephones sold do not fall into the same category. (C) Advertising has made the brand name of Mammoth Industriesâ€™ telephones widely known, but few consumers know that Mammoth Industries owns this brand.
People are buying the phone. That is the important part. Whether these people know that Mammoth owns the brand is not important to sales.(D) Mammoth Industriesâ€™ telephone is one of three brands of telephone that have together accounted for the bulk of the last yearâ€™s increase in sales.
That's great - looks like mammoth is doing well, and will continue to do well by expanding its production. (E) Despite a slight decline in the retail price, sales of Mammoth Industriesâ€™ telephones have fallen in the last year.
Hmm...suddenly things do not look so rosy for Mammoth. The rest of the market did well, yet Mammoth phones did poorly. Thus, one can't base market trends on Mammoth's phones sales. Sure the market may continue to do well, but that does not imply Mammoth will be able to take advantage of a surging market.
Magoosh Test Prep