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Surveys show that every year only 10 percent of cigarette

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SVP
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Surveys show that every year only 10 percent of cigarette [#permalink] New post 02 Jan 2007, 11:01
00:00
A
B
C
D
E

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0% (00:00) correct 0% (00:00) wrong based on 0 sessions
Surveys show that every year only 10 percent of cigarette smokers switch brands. Yet the manufacturers have been spending an amount equal to 10 percent of their gross receipts on cigarette promotion in magazines. It follows from these figures that inducing cigarette smokers to switch brands did not pay, and that cigarette companies would have been no worse off economically if they had dropped their advertising.

Of the following, the best criticism of the conclusion that inducing cigarette smokers to switch brands did not pay is that the conclusion is based on
(A) computing advertising costs as a percentage of gross receipts, not of overall costs
(B) past patterns of smoking and may not carry over to the future
(C) the assumption that each smoker is loyal to a single brand of cigarettes at any one time
(D) the assumption that each manufacturer produces only one brand of cigarettes
(E) figures for the cigarette industry as a whole and may not hold for a particular company

Explanations will be much appreciated.

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Senior Manager
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 [#permalink] New post 02 Jan 2007, 14:09
i feel E..

argument is saying what is true for whole will also be true for the parts.. hence will be a good criticism..
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 [#permalink] New post 02 Jan 2007, 20:44
I would not have selected E on test day (though OA is E) because of this statement "Yet the manufacturers have been spending an amount equal to 10 percent of their gross receipts". It is just not one company that is spending money; it is definitely a larger segment. Hence the criticism that "what is true for a group may not true for an individual" is not applicable (or at least that is what I thought).

Bottomline : My score is zero on this question.

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 [#permalink] New post 02 Jan 2007, 22:21
E

The argument implies that cigarette companies have not gained more than what they have lost in costs. This can be criticized by E; some companies may have spent much less than 10% and have therefore gained from their promotion spending.
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 [#permalink] New post 03 Jan 2007, 03:35
I liked how palihu criticized this question...:) I chose C for this.

http://www.gmatclub.com/phpbb/viewtopic ... tch+brands
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 [#permalink] New post 03 Jan 2007, 06:55
hsampath wrote:
I liked how palihu criticized this question...:) I chose C for this.

http://www.gmatclub.com/phpbb/viewtopic ... tch+brands


Agree with hsampath and Swagatalakshmi.

I was not happy with the OA(E) and thats the reason I posed the question. I picked C too because I had to pick one.

Thanks hsampath for the link to pelihu's post.

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 [#permalink] New post 03 Jan 2007, 16:04
With E you are stating clearly that the conclusion is not reliable. I´d say it´s E.
  [#permalink] 03 Jan 2007, 16:04
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