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Although sales of luxury goods sharply decreased immediately

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Manager
Joined: 08 Jun 2010
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Although sales of luxury goods sharply decreased immediately [#permalink]

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22 May 2011, 04:27
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44% (02:26) correct 56% (01:41) wrong based on 429 sessions

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Although sales of luxury goods sharply decreased immediately following the stock market crash, sales of such goods have since doubled. If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on luxury goods for recession-wary consumers.

If the statements above are true, which of the following can be inferred?

A. The increase in luxury purchases can most likely be attributed to recent improvements in the state of the economy.
B. After the stock market crash, consumers were afraid to make major purchases, especially of luxury goods.
C. Retailers of luxury goods are currently offering no discounts on their products.
D. The stock market crash resulted in an over 50 percent decrease in sales of luxury goods.
E. The economy would be more stable if all retailers offered additional discounts on their products during economic recessions.
[Reveal] Spoiler: OA
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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22 May 2011, 04:36
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rojans wrote:
Although sales of luxury goods sharply decreased immediately following the stock market crash, sales of such goods have since doubled. If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on
luxury goods for recession-wary consumers. If the statements above are true, which of the following can be inferred?
A. The increase in luxury purchases can most likely be attributed to recent improvements in the state of the economy. Not concerned with the increase
B. After the stock market crash, consumers were afraid to make major purchases, especially of luxury goods. I kept it on hold ...
C. Retailers of luxury goods are currently offering no discounts on their products. out of scope
D. The stock market crash resulted in an over 50 percent decrease in sales of luxury goods. perfect answer. Suppose the pre crash sales of Luxury goods was 100, it decreased more than 50% so its now 40. but now it has doubled --- so its 80 ,still less than 100( pre cash sales) perfectly answers why discounts must be given
E. The economy would be more stable if all retailers offered additional discounts on their products during economic recessions. out of scope
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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23 May 2011, 22:21
Hmm...Very good question. I took 4.22 minutes to complete this and got the answer right

My reasoning is as follows:

Fact 1: Sales of Luxury Goods decreased immediately after the stock market crash

Fact 2: Sales of Luxury Goods doubled since the immediate decrease

Fact 3: To return to pre-recession rate, retailers must offer significant discounts on Luxury Goods for recession-wary consumers.

In "Fact 2", the author mentions that the sales of Luxury Goods have since doubled. He means, the sales have doubled from the "time immediately after the stock-market crash". The author is not comparing the sales with pre-market-crash period.

Option (A) : No relevance
Option (B) : Even though, this option looks like an answer, it doesn't talk about sales at all
Option (C) : No relevance
Option (D) : This option rightly answers our concerns about Fact 1, Fact 2 and Fact 3
Option (E) : This option states a generic statement which cannot be strongly inferred from the argument above.

So, the correct answer is Option (D)
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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24 May 2011, 04:31
consumer sales = x
after recession = 0.5x

doubling post recession 0.5x *2 = x
but it has not reached pre recession value.
Hence, k*x *2 = x where k <0.5

D is clear here.
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Manager
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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24 May 2011, 12:03
Is it D?
Manager
Joined: 16 Mar 2011
Posts: 177
Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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24 May 2011, 12:04
Sorry spoiler isnt displayed can someone confirm if D is the answer ?
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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24 May 2011, 12:40
Awesome question.

"If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on luxury goods for recession-wary consumers."
=> there is still a gap, which could be filled by giving the discounts.
Even after doubling the sales, the sales have not reached the initial level => the sales actually decreased more than 50% post market crash.

But What is wrong with B?
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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01 Jun 2011, 09:51
+1 D

Let's suppose that the sales of luxury goods before recession is 100.
The argument mentions that although the sales after the stock market crash has doubled, the sales has not reached the amount before that crash (100).

In this sense, the sales inmediately after tha crash must has decreased in a 51% or more. If they have decreased in 50% or less, the current sales must be 100 again. Let me illustrate it:

Before the crash: 100
Inmediately after the crash: 50
Recovery: 50 x 2 = 100 again.

D is the winner.
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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01 Jun 2011, 22:27
Nice ques.. Fell for B ...
After reading explanation D seems to a good ans too ..
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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06 Jul 2014, 23:54
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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02 Sep 2015, 15:51
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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21 Oct 2015, 02:14
rojans wrote:
Although sales of luxury goods sharply decreased immediately following the stock market crash, sales of such goods have since doubled. If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on luxury goods for recession-wary consumers.

If the statements above are true, which of the following can be inferred?

A. The increase in luxury purchases can most likely be attributed to recent improvements in the state of the economy.
B. After the stock market crash, consumers were afraid to make major purchases, especially of luxury goods.
C. Retailers of luxury goods are currently offering no discounts on their products.
D. The stock market crash resulted in an over 50 percent decrease in sales of luxury goods.
E. The economy would be more stable if all retailers offered additional discounts on their products during economic recessions.

Luxury goods sharply decreased and double but yet it didnt reach the pre-recession value.
For example -> L.G trading at 100 and during stock crash it falls to 51 and it doubled means its trading at 102 which is Greater than pre-recission value.
hence D is the option. Only when it falls over 50% it shouldnot hav reached the pre recission value.
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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03 May 2017, 05:40
rojans wrote:
Although sales of luxury goods sharply decreased immediately following the stock market crash, sales of such goods have since doubled. If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on luxury goods for recession-wary consumers.

If the statements above are true, which of the following can be inferred?

A. The increase in luxury purchases can most likely be attributed to recent improvements in the state of the economy.
B. After the stock market crash, consumers were afraid to make major purchases, especially of luxury goods.
C. Retailers of luxury goods are currently offering no discounts on their products.
D. The stock market crash resulted in an over 50 percent decrease in sales of luxury goods.
E. The economy would be more stable if all retailers offered additional discounts on their products during economic recessions.

I have nothing new to add except that Option C is such an Obvious Trap that you should see it coming from a mile away.
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Re: Although sales of luxury goods sharply decreased immediately [#permalink]

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04 May 2017, 23:13
Solved it in less than 2mins. Using POE and logic can fasten the problem solving time.
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Re: Although sales of luxury goods sharply decreased immediately   [#permalink] 04 May 2017, 23:13
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