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# An industry analyst asserted in his recent report that the relative sc

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Re: An industry analyst asserted in his recent report that the relative sc [#permalink]
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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: An industry analyst asserted in his recent report that the relative sc [#permalink]
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I posted answer to this question yesterday , but I do not see my post.
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Re: An industry analyst asserted in his recent report that the relative sc [#permalink]
Can someone explain why C is wrong here ?
OA is D
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Re: An industry analyst asserted in his recent report that the relative sc [#permalink]
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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: An industry analyst asserted in his recent report that the relative sc [#permalink]
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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.

TOUGH question, it really makes you think.

A) not sure how this is relevant
B) this is simply a definition of demand. This does not help our argument.
C) We're talking about particular markets not the entire housing market.
D) CORRECT. The issue in the stem is whether it is truly a scarcity that is causing the price to increase. What if there wasn't a scarcity of housing and home owners were just unwilling to sell that caused the supply to drop and the price to increase? This answers that concern.
E) irrelevant
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Re: An industry analyst asserted in his recent report that the relative sc [#permalink]
This one is really tough, it took me quit a while. A didn’t take long to eliminate, of course, since it is completely irrelevant. B isn’t an assumption at all, its just the definition of demand. C introduces additional information, we are not talking about the US housing market. E is also irrelevant. So, D is the correct answer. The weakness in the original argument is that there is another reason, besides scarcity, that could cause the price increase. People might just not be selling their houses. D, however, tells us that is not the case. This removes a potential ambiguity.
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Re: An industry analyst asserted in his recent report that the relative sc [#permalink]
Analyst assumes scarcity as the cause of price increases of properties but for this to happen one of the assumptions can be that people are not intentionally occupying the properties to boost up the prices higher that is assumption is effect is not leading to the cause and hence option D is correct
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Re: An industry analyst asserted in his recent report that the relative sc [#permalink]
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Re: An industry analyst asserted in his recent report that the relative sc [#permalink]
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