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Bamboo is a chain of American stores selling Bamboo sprouts, Mushrooms

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Bamboo is a chain of American stores selling Bamboo sprouts, Mushrooms  [#permalink]

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New post 21 Jul 2018, 00:13
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E

Difficulty:

  35% (medium)

Question Stats:

72% (02:10) correct 28% (02:35) wrong based on 75 sessions

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Bamboo is a chain of American stores selling Bamboo sprouts, Mushrooms and other Chinese food ingredients. In USA, Bamboo sprouts' retail prices are set by importers, and the retailer's share is 19 percent. Since Bamboo's margin on home-grown Mushrooms is much higher, the chain's management plans to devote more of its stores' shelf space to Mushrooms and reduce the Bamboo inventory that the stores carry.

Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Bamboo's profits?

A. Recently Bamboo importers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the best quality Bamboo sprouts.

B. In market research surveys, few consumers identify Bamboo as a Mushroom store but many recognize and value the broad range of Bamboo Sprouts it carries.

C. The Importer's share of the retail price is 50 percent, and they also retain all of the excess revenue due to the occasional sharp price fluctuations.

D. Consumers who buy Bamboo Sprouts from direct sales stores generally pay less per than they would if they bought them through a retail outlet such as Bamboo.

E. Some of Bamboo's locations are in small towns and represent the only retail outlet for Mushrooms within the community.

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Bamboo is a chain of American stores selling Bamboo sprouts, Mushrooms  [#permalink]

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New post 21 Jul 2018, 02:08
Bamboo is a chain of American stores selling Bamboo sprouts, Mushrooms and other Chinese food ingredients. In USA, Bamboo sprouts' retail prices are set by importers, and the retailer's share is 19 percent. Since Bamboo's margin on home-grown Mushrooms is much higher, the chain's management plans to devote more of its stores' shelf space to Mushrooms and reduce the Bamboo inventory that the stores carry.

Reasoning..
Bamboo is a cabin of stores. Item B has less margin as it is imported and retail prices are set by importers. Homegrown A is more profitable, so place more of A in place of B.

We have to find a reason that profits will not increase...


Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Bamboo's profits?

A. Recently Bamboo importers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the best quality Bamboo sprouts.
retail prices being cut , but nothing about increase in profits for bamboo or not..

B. In market research surveys, few consumers identify Bamboo as a Mushroom store but many recognize and value the broad range of Bamboo Sprouts it carries
so few customers come to bamboos to buy A and come for B only, so if B is replaced lesser sales of B and no increase in a is envisaged so profits will not go up
.. CORRECT
.

C. The Importer's share of the retail price is 50 percent, and they also retain all of the excess revenue due to the occasional sharp price fluctuations.
Nothing about profit..

D. Consumers who buy Bamboo Sprouts from direct sales stores generally pay less per than they would if they bought them through a retail outlet such as Bamboo.
we are talking of profits of Bamboo chain only

E. Some of Bamboo's locations are in small towns and represent the only retail outlet for Mushrooms within the community.
no.. it doesn't do anything much and would do the opposite that replacing B with A may be good

B
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Bamboo is a chain of American stores selling Bamboo sprouts, Mushrooms &nbs [#permalink] 21 Jul 2018, 02:08
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