There is relatively little room for growth in the overall : GMAT Critical Reasoning (CR)
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# There is relatively little room for growth in the overall

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Director
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There is relatively little room for growth in the overall [#permalink]

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14 Jun 2005, 11:59
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9. There is relatively little room for growth in the overall carpet market, which is tied to the size of the population. Most who purchase carpet do so only once or twice, first in their twenties or thirties, and then perhaps again in their fifties or sixties. Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?

(A) Most of the major carpet producers market other floor coverings as well.
(B) Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill.
(C) Two of the three mergers in the industryâ€™s last ten years led to a decline in profits and revenues for the newly merged companies.
(D) Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether.
(E) The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles.
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Director
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14 Jun 2005, 15:53
D
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14 Jun 2005, 17:26
D.
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14 Jun 2005, 17:37
1) There is relatively little room for growth in the overall carpet market
2) Market is tied to the size of the population.
3) Most who purchase carpet do so only once or twice, first in their twenties or thirties, and then perhaps again in their fifties or sixties.
4) Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?

(A) Most of the major carpet producers market other floor coverings as well.
- out of scope

(B) Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill.
- out of scope

(C) Two of the three mergers in the industryâ€™s last ten years led to a decline in profits and revenues for the newly merged companies.
- out of scope

(D) Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether.
- This one tells us another reason why companies are not able to gain market share

(E) The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles.
- Not important

D it is.
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14 Jun 2005, 19:22
Conclusion is --Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

We are asked --Which one of the following, if true, casts the most doubt on the conclusion above?

Conclusion says merger is the only way to gain market share (increase profits) and
option "C"Two of the three mergers in the industryâ€™s last ten years led to a decline in profits and revenues for the newly merged companies

shows that in past 10 years mergers have failed so it casts doubts on the conclusion above.

And infact "D" is out of scope .it talks about an alternative to aging theory
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14 Jun 2005, 21:47
C for me too.
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14 Jun 2005, 23:39
I'd say C too
Director
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15 Jun 2005, 03:58
(C) for me. (D) looks irrelevant to me.
Director
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15 Jun 2005, 12:09
All except C and D are irrevelent.

Infact C can be ruled out too. It says previous mergers have caused declines in profits and revenues but it is possible that those companies were just not competitors and there could be several hundered reasons for their failure.

D says price reduction is killing the competition, so there is no need to merge with other competitors since they are leaving the market.

My interpretation could be wrong...
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15 Jun 2005, 13:33
The OA is D.
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