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805+ Level|   Inference|      
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GDT
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Because competition has dramatically lowered margins in the industry, 20 Mar 2020, 02:45
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TaN1213 wrote:
Because competition has dramatically lowered margins in the industry, Euroquest must reduce personnel expenditures by at least 15% over the next year in order to remain solvent. In order to do so, Euroquest would have to cut entire divisions and benefits programs such that it would reduce personnel expenditures by a full 25% over the next year.

Which of the following can be logically inferred from the information above?


A. Euroquest reduces personnel expenditures by 25% over the next year it will remain solvent.

B. If Euroquest cannot reduce personnel expenditures by 25% over the next year it will not remain solvent.

C. Euroquest is unable to charge as much for its products as it was a year ago.

D. Euroquest competitors earn a higher return on investment for personnel expenditures than Euroquest does.

E. Some of Euroquest competitors will also have to significantly reduce personnel expenditures in order to remain solvent.
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Quote:
VERITAS PREP OFFICIAL EXPLANATION:



In an Inference problem, the right answer must be true, meaning that you can use process of elimination to rule out any answers that could be false.

Choice C can also be eliminated via a hypothetical situation. Sure, it may be that the competition referenced in the argument is driving costs down, but what if Euroquest is in a resources-starved industry - say its primary ingredient is enriched uranium - and competition is driving up the price of raw materials. That would be consistent with the facts but violate the conclusion, so choice C can be eliminated.
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Hi Bunuel

I've a doubt in C, it says Euroquest is unable to charge for its products as much as it was a year ago

In the stimulus we are given that competition has dramatically lowered the margins-> this means that profit margins are small and in case of competition we have to reduce revenue/ sale price but explanation says that costs are driven down

I selected C because of this reason. Pls help with this question

Thanks in advance!
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Because competition has dramatically lowered margins in the industry, 15 Apr 2020, 00:21
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Quote:
TaN1213 wrote:
Because competition has dramatically lowered margins in the industry, Euroquest must reduce personnel expenditures by at least 15% over the next year in order to remain solvent. In order to do so, Euroquest would have to cut entire divisions and benefits programs such that it would reduce personnel expenditures by a full 25% over the next year.

Which of the following can be logically inferred from the information above?


A. Euroquest reduces personnel expenditures by 25% over the next year it will remain solvent.

B. If Euroquest cannot reduce personnel expenditures by 25% over the next year it will not remain solvent.

C. Euroquest is unable to charge as much for its products as it was a year ago.

D. Euroquest competitors earn a higher return on investment for personnel expenditures than Euroquest does.

E. Some of Euroquest competitors will also have to significantly reduce personnel expenditures in order to remain solvent.


Quote:
VERITAS PREP OFFICIAL EXPLANATION:



In an Inference problem, the right answer must be true, meaning that you can use process of elimination to rule out any answers that could be false.

Choice C can also be eliminated via a hypothetical situation. Sure, it may be that the competition referenced in the argument is driving costs down, but what if Euroquest is in a resources-starved industry - say its primary ingredient is enriched uranium - and competition is driving up the price of raw materials. That would be consistent with the facts but violate the conclusion, so choice C can be eliminated.

Hi Bunuel

I've a doubt in C, it says Euroquest is unable to charge for its products as much as it was a year ago

In the stimulus we are given that competition has dramatically lowered the margins-> this means that profit margins are small and in case of competition we have to reduce revenue/ sale price but explanation says that costs are driven down

I selected C because of this reason. Pls help with this question

Thanks in advance!
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Hey, answer choice C is out of the scope of the passage. The passage doesn't mention or compare what it charges/should charge/ must charge in order to remain solvent.

Hope this helps, let me know if you need more clarity.
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Because competition has dramatically lowered margins in the industry, 15 Apr 2020, 00:28
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TaN1213
Because competition has dramatically lowered margins in the industry, Euroquest must reduce personnel expenditures by at least 15% over the next year in order to remain solvent. In order to do so, Euroquest would have to cut entire divisions and benefits programs such that it would reduce personnel expenditures by a full 25% over the next year.

Which of the following can be logically inferred from the information above?


A. Euroquest reduces personnel expenditures by 25% over the next year it will remain solvent.

B. If Euroquest cannot reduce personnel expenditures by 25% over the next year it will not remain solvent.

C. Euroquest is unable to charge as much for its products as it was a year ago.

D. Euroquest competitors earn a higher return on investment for personnel expenditures than Euroquest does.

E. Some of Euroquest competitors will also have to significantly reduce personnel expenditures in order to remain solvent.
Show more

VeritasKarishma has a very good article on sufficient and necessary conditions. I got this question wrong the first time and after reading the article it's much clear.

If you take for eg a scenario: "If A misbehaves, he will be punished"

Ques 1: Can we say the following: "if A doesn't misbehave, he won't be punished"?
No, we can't because he might not be punished for misbehaving but may get punished for talking too loudly in class or bullying someone, or anything else.

Ques 2: Can we say the following: "If A cannot refrain himself from misbehaving, he will get punished"?
Yes! we absolutely can. Since we know that misbehaving will definitely lead to punishment and if he can't refrain himself from misbehaving it will most def lead to a punishment.

Ques 1 is what answer choice A is saying and Ques 2 is what answer choice B is saying. Now we know why B is correct and A completely wrong!
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Because competition has dramatically lowered margins in the industry, 22 Nov 2024, 23:18
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