Find all School-related info fast with the new School-Specific MBA Forum

It is currently 30 Sep 2014, 10:38

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Surveys show that every year only 10 percent of cigarette

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
7 KUDOS received
Manager
Manager
avatar
Joined: 02 May 2008
Posts: 87
Followers: 1

Kudos [?]: 39 [7] , given: 0

Surveys show that every year only 10 percent of cigarette [#permalink] New post 15 Jul 2008, 08:20
7
This post received
KUDOS
5
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  95% (hard)

Question Stats:

28% (02:21) correct 72% (01:32) wrong based on 717 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
[Reveal] Spoiler: OA
Senior Manager
Senior Manager
avatar
Joined: 29 Aug 2005
Posts: 283
Followers: 1

Kudos [?]: 23 [0], given: 0

Re: CR-Cigarette smokers [#permalink] New post 15 Jul 2008, 11:58
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry

this looks like an LSAT question to me
_________________

The world is continuous, but the mind is discrete

Senior Manager
Senior Manager
avatar
Joined: 25 Nov 2006
Posts: 277
Followers: 2

Kudos [?]: 23 [0], given: 0

Re: CR-Cigarette smokers [#permalink] New post 15 Jul 2008, 12:07
E for me too...but C is a close call.....(at one time....is what swayed the balance)
Senior Manager
Senior Manager
avatar
Joined: 24 Feb 2007
Posts: 267
Location: nj
Followers: 1

Kudos [?]: 47 [0], given: 2

Re: CR-Cigarette smokers [#permalink] New post 15 Jul 2008, 12:25
IMO its C

the conclusion is based on cig. promotion and a company will only promote its cigarette. so the best criticism would be if people are smoking more than one brand at a time than its a waste of money to promote its cig.
Manager
Manager
avatar
Joined: 02 May 2008
Posts: 87
Followers: 1

Kudos [?]: 39 [0], given: 0

Re: CR-Cigarette smokers [#permalink] New post 17 Jul 2008, 05:03
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry


vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still don't understand why :(

Last edited by MamtaKrishnia on 21 Jul 2008, 22:19, edited 1 time in total.
7 KUDOS received
Senior Manager
Senior Manager
avatar
Joined: 25 Nov 2006
Posts: 277
Followers: 2

Kudos [?]: 23 [7] , given: 0

Re: CR-Cigarette smokers [#permalink] New post 17 Jul 2008, 05:36
7
This post received
KUDOS
MamtaKrishnia wrote:
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry


vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still understand why :(


Let me try and explain this to you.

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

Break this down.

Conclusion : Inducing cigarette smokers to switch brands did not pay dividends.

Evidence 1 : Surveys show that every year only 10 percent of cigarette smokers switch brands.
Evidence 2 : Cigarette companies would have been no worse off economically if they had dropped their advertising.

What really links the evidence to the conclusion?

1. That the surveys are accurate and that they can be generalised.
2. The companies sales are dependent on the survey(no matter what the company does).

What can turn this around??

Option 1 : Surveys are not accurate
Option 2: Companies sales are not dependent on the survey and they can influence customers to change brands by different strategies.

Option 1 is not there in the answer choices
Option 2 is what E talks about...hence E.

C was close (if 'at any one time' was not present in the answer choice), what it does is weakens what the survey tries to prove, and thus strengthens option 1.
Senior Manager
Senior Manager
avatar
Joined: 24 Feb 2007
Posts: 267
Location: nj
Followers: 1

Kudos [?]: 47 [0], given: 2

Re: CR-Cigarette smokers [#permalink] New post 17 Jul 2008, 06:22
I understand your reasoning below. but i still think that C is a better option because author says in E that the figures may not hold good for a particular company. But author is not talking about any particular company in the argument hes talking about "cigarette companies". Had he been specifically mentioned company XYZ in the paragraph then E would have been a better choice.

please do let me know if my understanding here is wrong.
26 KUDOS received
Director
Director
avatar
Joined: 06 Jan 2008
Posts: 560
Followers: 2

Kudos [?]: 101 [26] , given: 2

Re: CR-Cigarette smokers [#permalink] New post 17 Jul 2008, 06:27
26
This post received
KUDOS
2
This post was
BOOKMARKED
MamtaKrishnia wrote:
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry


vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still understand why :(


Paraphrasing the argument:
Inspite of spending large amounts of money, only 10% switched brands. (in the entire industry)
So, why to spend so much money when you see only 10% results?

Sounds reasonable. But there is a problem.

Lets say the entire smoking industry consists of 2 companies A and B with 50 customers each.
And each company spends money to make customers switch the brand.
So total industry smokers = 100.

After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).
And if you tell him "why to spend so much money when you see only 10% results?" he will not accept it.Because he is seeing good results.
But at the same time, A's CEO may accept the above statement.

So now, the fact(10% swithched brands) which is true to the entire industry is NOT true to the company B. (due to +ve change)

And thats exactly what option E is saying.
nice question. +1 to you.
Senior Manager
Senior Manager
avatar
Joined: 25 Nov 2006
Posts: 277
Followers: 2

Kudos [?]: 23 [0], given: 0

Re: CR-Cigarette smokers [#permalink] New post 17 Jul 2008, 06:32
neeshpal wrote:
I understand your reasoning below. but i still think that C is a better option because author says in E that the figures may not hold good for a particular company. But author is not talking about any particular company in the argument hes talking about "cigarette companies". Had he been specifically mentioned company XYZ in the paragraph then E would have been a better choice.

please do let me know if my understanding here is wrong.


Think about what you are set out to do here :)....you are vouching for the Author right? Don't play the devils advocate here.

Here in E -'figures may not hold good for a particular company'. The 'particular company' could very well be the company in referrence here right?? :)
VP
VP
User avatar
Joined: 03 Apr 2007
Posts: 1377
Followers: 3

Kudos [?]: 188 [0], given: 10

Reviews Badge
Re: CR-Cigarette smokers [#permalink] New post 17 Jul 2008, 09:14
The CR is based on a simple concept- One company's loss is another company's Gain

The author is assuming that spending 10% of gross receipts to induce 10% of cigarette smokers switch brands is not worth the money.

A statement that will prove the assumption is flawed will criticze the conclusion.

E
Manager
Manager
avatar
Joined: 02 May 2008
Posts: 87
Followers: 1

Kudos [?]: 39 [0], given: 0

Re: CR-Cigarette smokers [#permalink] New post 19 Jul 2008, 05:56
saravalli wrote:
Paraphrasing the argument:
Inspite of spending large amounts of money, only 10% switched brands. (in the entire industry)
So, why to spend so much money when you see only 10% results?

Sounds reasonable. But there is a problem.

Lets say the entire smoking industry consists of 2 companies A and B with 50 customers each.
And each company spends money to make customers switch the brand.
So total industry smokers = 100.

After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).
And if you tell him "why to spend so much money when you see only 10% results?" he will not accept it.Because he is seeing good results.
But at the same time, A's CEO may accept the above statement.

So now, the fact(10% swithched brands) which is true to the entire industry is NOT true to the company B. (due to +ve change)

And thats exactly what option E is saying.


saravalli,
This is an awesome explanation ...
Thanks a ton ..this really helped. +1 :-D
Senior Manager
Senior Manager
avatar
Joined: 24 Feb 2007
Posts: 267
Location: nj
Followers: 1

Kudos [?]: 47 [0], given: 2

Re: CR-Cigarette smokers [#permalink] New post 19 Jul 2008, 10:02
I am not vouching for author here. My sole intent was to understand this CR. I just used "author" to refer to the paragraph.

Thanks to all the explanations above. They helped a lot.


Ashwin_Mohan wrote:
neeshpal wrote:
I understand your reasoning below. but i still think that C is a better option because author says in E that the figures may not hold good for a particular company. But author is not talking about any particular company in the argument hes talking about "cigarette companies". Had he been specifically mentioned company XYZ in the paragraph then E would have been a better choice.

please do let me know if my understanding here is wrong.


Think about what you are set out to do here :)....you are vouching for the Author right? Don't play the devils advocate here.

Here in E -'figures may not hold good for a particular company'. The 'particular company' could very well be the company in referrence here right?? :)
Manager
Manager
User avatar
Joined: 04 Apr 2008
Posts: 229
Location: Pune
Followers: 2

Kudos [?]: 21 [0], given: 3

Re: CR-Cigarette smokers [#permalink] New post 20 Jul 2008, 19:16
is that E or A..........................
can anyone explain me the answer????????????????????????
_________________

Every Problem Has a Sloution So keep working
AB

Intern
Intern
avatar
Joined: 29 Jul 2010
Posts: 46
Followers: 0

Kudos [?]: 3 [0], given: 1

Re: CR-Cigarette smokers [#permalink] New post 19 Aug 2010, 21:14
Its a clear E :wink:
1 KUDOS received
Manager
Manager
avatar
Joined: 17 Oct 2008
Posts: 199
Followers: 1

Kudos [?]: 13 [1] , given: 11

Re: CR-Cigarette smokers [#permalink] New post 19 Aug 2010, 21:26
1
This post received
KUDOS
mymba99 wrote:
MamtaKrishnia wrote:
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry


vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still understand why :(


Paraphrasing the argument:
Inspite of spending large amounts of money, only 10% switched brands. (in the entire industry)
So, why to spend so much money when you see only 10% results?

Sounds reasonable. But there is a problem.

Lets say the entire smoking industry consists of 2 companies A and B with 50 customers each.
And each company spends money to make customers switch the brand.
So total industry smokers = 100.

After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).
And if you tell him "why to spend so much money when you see only 10% results?" he will not accept it.Because he is seeing good results.
But at the same time, A's CEO may accept the above statement.

So now, the fact(10% swithched brands) which is true to the entire industry is NOT true to the company B. (due to +ve change)

And thats exactly what option E is saying.
nice question. +1 to you.

Awesome Explanation.! i picked C though..
Senior Manager
Senior Manager
avatar
Joined: 12 Oct 2009
Posts: 272
Schools: Columbia, INSEAD, RSM, LBS
Followers: 2

Kudos [?]: 33 [0], given: 4

Re: CR-Cigarette smokers [#permalink] New post 20 Aug 2010, 09:49
got confused between C and E but after the reasoning given above, would go with E
Senior Manager
Senior Manager
avatar
Joined: 12 Oct 2009
Posts: 272
Schools: Columbia, INSEAD, RSM, LBS
Followers: 2

Kudos [?]: 33 [0], given: 4

Re: CR-Cigarette smokers [#permalink] New post 20 Aug 2010, 09:49
got confused between C and E but after the reasoning given above, would go with E
Manager
Manager
avatar
Joined: 04 Aug 2010
Posts: 158
Followers: 2

Kudos [?]: 24 [0], given: 15

Re: CR-Cigarette smokers [#permalink] New post 20 Aug 2010, 10:16
mymba99 wrote:
After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).


this clears it up for me. i would've never thought of this reasoning. thanks
Manager
Manager
avatar
Joined: 29 Sep 2008
Posts: 154
Followers: 2

Kudos [?]: 32 [0], given: 1

Re: CR-Cigarette smokers [#permalink] New post 16 Oct 2010, 11:04
according to C if people are smoking more than 2 brands then it is bringing more revenue to the comany and even if the company is spending 10% on advertisment still it is getting more profit than whne it would have earned by dropping the advertisment.so it weakens the conclusion
Manager
Manager
avatar
Joined: 27 Jul 2010
Posts: 97
Location: Sweden
Concentration: Finance, International Business
Schools: Stockholm School of Economics (MSc Finance) - Class of 2014
GMAT 1: 720 Q49 V40
GPA: 4
Followers: 3

Kudos [?]: 19 [0], given: 6

Re: CR-Cigarette smokers [#permalink] New post 24 Aug 2011, 04:11
pretty complicated for me :(
CR are the toughest section for me
Re: CR-Cigarette smokers   [#permalink] 24 Aug 2011, 04:11
    Similar topics Author Replies Last post
Similar
Topics:
Surveys show that every year only 10 percent of cigarette SudiptoGmat 3 18 Jan 2010, 06:37
Surveys show that every year only 10 percent of cigarette spriya 7 24 Jul 2008, 09:04
Surveys show that every year only 10 percent of cigarette vineetgupta 4 30 Jun 2007, 08:37
Surveys show that every year only 10 percent of cigarette ncp 6 02 Jan 2007, 11:01
Surveys show that every year only 10 percent of cigarette remgeo 8 05 Apr 2006, 04:29
Display posts from previous: Sort by

Surveys show that every year only 10 percent of cigarette

  Question banks Downloads My Bookmarks Reviews Important topics  

Go to page    1   2    Next  [ 34 posts ] 



cron

GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.