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# *700* An industry analyst asserted in his recent report that

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MBA Section Director
Joined: 19 Mar 2012
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Kudos [?]: 17089 [2], given: 1963

Location: India
GMAT 1: 760 Q50 V42
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WE: Marketing (Non-Profit and Government)
*700* An industry analyst asserted in his recent report that [#permalink]

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23 Apr 2015, 06:47
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Difficulty:

65% (hard)

Question Stats:

63% (02:04) correct 37% (02:13) wrong based on 396 sessions

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An industry analyst asserted in his recent report that the relative scarcity of housing in a particular market leads to larger than normal increases in price. During the late 1990s, according to the analyst's report, occupancy rates-a measure of the percentage of housing occupied at a given time-in crowded urban markets such as New York and San Francisco hovered around 99.5%. During the same period, housing prices increased by as much as 100% per year, compared to more normal past increases in the range of 5% to 15% per year. Which of the following is an assumption that supports the analyst's assertion?

A. In the housing market, there generally must be at least five buyers per seller in order to cause larger than normal increases in price.

B. Increases in demand often reflect an influx of new buyers into the marketplace or an unusual increase in buying power on the part of the customer.

C. The U.S. housing market showed a larger than average increase in the 1990s across the country, not just in crowded urban areas.

D. Price increases do not cause people to withhold their houses from the market in the hopes that prices will increase even further in the future.

E. A significant rise in housing prices in a specific area may cause some potential buyers to relocate to other, less pricey areas.
[Reveal] Spoiler: OA

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Re: *700* An industry analyst asserted in his recent report that [#permalink]

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23 Apr 2015, 10:00
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Cause and Effect analysis of the argument states that Scarcity causes rise in Price. Now if the assumption in option D is negated, the situation becomes Price rise causes scarcity and the argument falls flat. D should be the answer.
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Kudos [?]: 94 [2], given: 73

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Re: *700* An industry analyst asserted in his recent report that [#permalink]

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23 Apr 2015, 12:01
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Tough call between B and C. Will go with C.

souvik101990 wrote:
An industry analyst asserted in his recent report that the relative scarcity of housing in a particular market leads to larger than normal increases in price. During the late 1990s, according to the analyst's report, occupancy rates-a measure of the percentage of housing occupied at a given time-in crowded urban markets such as New York and San Francisco hovered around 99.5%. During the same period, housing prices increased by as much as 100% per year, compared to more normal past increases in the range of 5% to 15% per year. Which of the following is an assumption that supports the analyst's assertion?

A. In the housing market, there generally must be at least five buyers per seller in order to cause larger than normal increases in price.

B. Increases in demand often reflect an influx of new buyers into the marketplace or an unusual increase in buying power on the part of the customer.

C. The U.S. housing market showed a larger than average increase in the 1990s across the country, not just in crowded urban areas.

D. Price increases do not cause people to withhold their houses from the market in the hopes that prices will increase even further in the future.

E. A significant rise in housing prices in a specific area may cause some potential buyers to relocate to other, less pricey areas.

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Re: *700* An industry analyst asserted in his recent report that [#permalink]

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24 Apr 2015, 04:24
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I posted answer to this question yesterday , but I do not see my post.

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Re: *700* An industry analyst asserted in his recent report that [#permalink]

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02 May 2015, 14:02
Can someone explain why C is wrong here ?
OA is D

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Re: *700* An industry analyst asserted in his recent report that [#permalink]

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02 May 2015, 15:51
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Can someone explain why C is wrong here ?
OA is D

In this question we have cause and effect situation: scarcity of selling houses lead to price increase.
Usually when we have such cuase-effect situation in argument, we should find an assumption that ensure that effect doesn't cause "cause" or that effect doesn't have another cause.
In this argument possible another scenario: prices go up and people with houses decide not to sell them and this lead to deficit of houses. And this is ruin conclusion of analytic: "analyst asserted that the relative scarcity of housing leads to larger than normal increases in price."
Answer D ensure that this variant doesn't has place in our situation.

Answer C is wrong because it says that in other regions, which doesn't have scarcity, prices go up to. So this answer weaken conclusion of analytic, because there is another reason why prices go up.
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Re: *700* An industry analyst asserted in his recent report that [#permalink]

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03 May 2015, 11:34
2
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Harley1980 wrote:
Can someone explain why C is wrong here ?
OA is D

In this question we have cause and effect situation: scarcity of selling houses lead to price increase.
Usually when we have such cuase-effect situation in argument, we should find an assumption that ensure that effect doesn't cause "cause" or that effect doesn't have another cause.
In this argument possible another scenario: prices go up and people with houses decide not to sell them and this lead to deficit of houses. And this is ruin conclusion of analytic: "analyst asserted that the relative scarcity of housing leads to larger than normal increases in price."
Answer D ensure that this variant doesn't has place in our situation.

Answer C is wrong because it says that in other regions, which doesn't have scarcity, prices go up to. So this answer weaken conclusion of analytic, because there is another reason why prices go up.

Thanks

Kudos [?]: 14 [2], given: 59

MBA Section Director
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Kudos [?]: 17089 [0], given: 1963

Location: India
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WE: Marketing (Non-Profit and Government)
Re: *700* An industry analyst asserted in his recent report that [#permalink]

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03 May 2015, 16:04
The question stem asks you to determine the answer choice that damages the city council's plan. Since the conclusion states that the city's finances are not negatively affected, we know that in the right answer, the city's finances MUST be negatively affected in some way. This is seen in 'C'. So you have to look at the conclusion.
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Re: *700* An industry analyst asserted in his recent report that [#permalink]

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20 Aug 2017, 04:59
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Re: *700* An industry analyst asserted in his recent report that   [#permalink] 20 Aug 2017, 04:59
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