achloes wrote:
Quote:
(E) retailers in Aroca County are not likely to absorb the sales tax by reducing the pretax price of their goods
Would you mind shedding some light on what option E means and why it doesn't weaken the argument?
Thank you in advance!
Hello,
achloes. Answer choice (E) says, in basic language, that sellers of retail items [in the county in question] are not likely to reduce the price of what they sell. If an item cost $100 before, it is likely to still cost $100, rather than, say, $90. If we get more granular, we can calculate 3 percent of 100 and 90, respectively: $3 in the former case, $2.70 in the latter. What (E) is suggesting, then, is that the county can expect to gain the estimated revenue [through taxes] that the plan intends to collect from the sale of retail goods, and not some lesser amount. That might sound promising. However, the passage already tells us that
[t]hree percent of current retail sales is less than the amount collected through property taxes, so unless more goods are sold, the plan cannot be expected to succeed.
In general, if you cannot grasp what an answer choice is saying, it is a good idea to put it on hold while you search for less viable options that you do understand. You might luck out and either eliminate all the other answer choices or find one that you cannot dispute. In either case, there would be no need to worry about the confusing answer choice, since you would already have the best answer.
If you do not mind a spoiler, your question reminded me of
a similar one from GMAT Prep on the pretax price of a pack of cigarettes. Do not worry if that one stumps you: about half the people attempting it on this site miss it.
Good luck with your studies.
- Andrew
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