The cost of producing radios in Country Q is ten percent : GMAT Critical Reasoning (CR)
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# The cost of producing radios in Country Q is ten percent

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The cost of producing radios in Country Q is ten percent [#permalink]

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03 Feb 2005, 19:05
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The cost of producing radios in Country Q is ten percent less than the cost of producing radios in Country Y. Even after transportation fees and tariff charges are added, it is still cheaper for a company to import radios from Country Q to Country Y than to produce radios in Country Y. The statements above, if true, best support which of the following assertions?

A. Labor costs in Country Q are ten percent below those in Country Y.
B. Importing radios from Country Q to Country Y will eliminate ten percent of the manufacturing jobs in Country Y.
C. The tariff on a radio imported from Country Q to Country Y is less than ten percent of the cost of manufacturing the radio in Country Y.
D. The fee for transporting a radio from Country Q to Country Y is more than ten percent of the cost of manufacturing the radio in Country Q.
E. It takes ten percent less time to manufacture a radio in Country Q than it does in Country Y.
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03 Feb 2005, 22:26
CQ<(1-10%)CY
CQ+t+f<CY
t<10%CY

(C)
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04 Feb 2005, 04:42
MA wrote:
The cost of producing radios in Country Q is ten percent less than the cost of producing radios in Country Y. Even after transportation fees and tariff charges are added, it is still cheaper for a company to import radios from Country Q to Country Y than to produce radios in Country Y. The statements above, if true, best support which of the following assertions?

A. Labor costs in Country Q are ten percent below those in Country Y.
B. Importing radios from Country Q to Country Y will eliminate ten percent of the manufacturing jobs in Country Y.
C. The tariff on a radio imported from Country Q to Country Y is less than ten percent of the cost of manufacturing the radio in Country Y.
D. The fee for transporting a radio from Country Q to Country Y is more than ten percent of the cost of manufacturing the radio in Country Q.
E. It takes ten percent less time to manufacture a radio in Country Q than it does in Country Y.

Background:
total cost of importing radios from Country Q: 90%C + fees + transporting tariff
total cost of manufacturing radios in Country Y: C + fees

Conclustion: 90%C + fees + transporting cost < C + fees

So, assumption: transporting tariff must less than 10%C

OA is C
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04 Feb 2005, 08:30
C for me also.

A, B and E can be easily eliminated.

Labour costs being low in Q probably explains why costs are lower when manufactured in Q - but it does not result from the stem.
Reducing manufacturing jobs in Y do not have an influence on the charges of importing from Q.
E is probably a reason why the cost of manufacturing is lower but does not result from the statements in the stem.

It is clear from D total cost for importing from Q will rise to above cost of manufacturing in Y if D were true - hence it is not supported by the statements in the stem.
04 Feb 2005, 08:30
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