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Analyst: The pace of technological development brings a constant strea

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Re: Analyst: The pace of technological development brings a constant strea  [#permalink]

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New post 24 Feb 2016, 12:48
nilem94 wrote:
Analyst: The pace of technological development brings a constant stream of new devices to the market, and many of them enjoy commercial success. But announcing new technology too soon after the introduction of a successful device can backfire. Once consumers hear about the new device, they may stop buying the one currently on sale. So, if a company wishes to announce the upcoming sale of a new device, it should wait until purchases of the old device have begun to decline.

Which of the following, if true, would best support the analyst's main assertion?

a) New technology often becomes less expensive after an initial surge in sales.

b) Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong.

c) Many consumers are unable to determine whether new technology is superior to current technology.

d) Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases.

e) Consumers tend to be loyal to technology companies whose products they enjoy using

The correct answer is B.

I don't understand Manhattan's explanation, since I am asked to find a statement which supports the main assertion, which is that the announce of new technology results in decline of sales in old devices. My first guess was D), since I thought if consumers do not buy devices very often, they will either wait for the new technology or not buy a new one in case they have already bought an old device.
Can anyone help, please?


Please use spoilers ( As I have done ) to hide the answer and your explanations, in that way people will be able to solve the problem and guide you better , besides posting the answer after the question spoils the game, anyways welcome to GMATCLUB.

Lets try ,the options -

a) New technology often becomes less expensive after an initial surge in sales.

Cost is not the consideration for this question, the stimulus talks about sales of new technology after announcing a new technology


c) Many consumers are unable to determine whether new technology is superior to current technology.

If consumers are unable to determine whether new technology is superior /inferior they will not differentiate between purchase of old technology and new technology.


d) Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases.

Ok, now tell me how much does some represents ?

Some can be any number/percentage from 1 - 100 ( out of 100), thus the other ( as in this case )will depend entirely on the value of some.

1. Some = 99 , Others =1
2. Some = 10 , Others = 90

Now reconstruct the sentence -

1. Surveys have shown that 99 consumers make only one or two technology purchases per year, whereas 1 customer make more frequent purchases.

This means if a consumer is aware of a new technology 99 consumers will wait for the new technology to come before making the purchase decision.

2. Surveys have shown that 1 consumer make only one or two technology purchases per year, whereas 99 customers make more frequent purchases.

If consumers make frequent purchases they will have no time to wait for the new technology thus announcement of new technology will not reduce sale of old technology products.

e) Consumers tend to be loyal to technology companies whose products they enjoy using

Loyalty to Tech companies is not under consideration, we are talking about new technology products.




b) Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong.

This sentence tells us that if Tech companies advertise about new technology while the sale of old devices are still strong then it can adversely affect sales of old Technology products.


Thus out of the given options and through elimination process only (B) remains.

_________________

Thanks and Regards

Abhishek....

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Re: Analyst: The pace of technological development brings a constant strea &nbs [#permalink] 24 Feb 2016, 12:48

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