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The owners of a book store and a nearby coffee

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Concentration: Operations, Strategy
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The owners of a book store and a nearby coffee [#permalink]

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New post 02 Jun 2015, 21:52
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A
B
C
D
E

Difficulty:

  15% (low)

Question Stats:

74% (01:09) correct 26% (01:03) wrong based on 184 sessions

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The owners of a book store and a nearby coffee shop have decided to combine their businesses. Both owners believe that this merger will increase the number of customers and therefore the gross revenue, because customers who come for one reason may also decide to purchase something else.

Which of the following, if true, most weakens the owners' conclusion that a merger will increase revenue?

(A) Books and drinks can both be considered impulse purchases; often, they are purchased by customers without forethought.
(B) Profit margins at a coffee shop are generally significantly higher than profit margins at a book store.
(C) People who are able to read the first chapter of a book before buying are more likely to decide to buy the book.
(D) A large majority of the book store's current customer base already frequents the coffee shop.
(E) A combination book store and coffee shop that opened in a neighboring city last year has already earned higher than expected profits.
[Reveal] Spoiler: OA

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Last edited by apoorv601 on 03 Jun 2015, 03:05, edited 1 time in total.

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The owners of a book store and a nearby coffee [#permalink]

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New post 03 Jun 2015, 02:52
The owners of a book store and a nearby coffee shop have decided to combine their businesses. Both owners believe that this merger will increase the number of customers and therefore the gross revenue, because customers who come for one reason may also decide to purchase something else.

Which of the following, if true, most weakens the owners' conclusion that a merger will increase revenue?

(A) Books and drinks can both be considered impulse purchases; often, they are purchased by customers without forethought.
The type of purchase is not relevant.

(B) Profit margins at a coffee shop are generally significantly higher than profit margins at a book store.
We're not comparing coffee shop and book store profit margins.

(C) People who are able to read the first chapter of a book before buying are more likely to decide to buy the book.
Out of scope

(D) A large majority of the book store's current customer base already frequentsthe coffee shop.
If they currently share customers there's no reason to believe that joining the two shops would increase profits.

(E) A combination book store and coffee shop that opened in a neighboring city last year has already earned higher than expected profits
could strengthen the argument
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The owners of a book store and a nearby coffee [#permalink]

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New post 10 Aug 2015, 03:34
OptimusPrepJanielle wrote:
The owners of a book store and a nearby coffee shop have decided to combine their businesses. Both owners believe that this merger will increase the number of customers and therefore the gross revenue, because customers who come for one reason may also decide to purchase something else.

Which of the following, if true, most weakens the owners' conclusion that a merger will increase revenue?

(A) Books and drinks can both be considered impulse purchases; often, they are purchased by customers without forethought.
The type of purchase is not relevant.

(B) Profit margins at a coffee shop are generally significantly higher than profit margins at a book store.
We're not comparing coffee shop and book store profit margins.

(C) People who are able to read the first chapter of a book before buying are more likely to decide to buy the book.
Out of scope

(D) A large majority of the book store's current customer base already frequentsthe coffee shop.
If they currently share customers there's no reason to believe that joining the two shops would increase profits.

(E) A combination book store and coffee shop that opened in a neighboring city last year has already earned higher than expected profits
could strengthen the argument


Hi

Have a question on this one. D I feel is not really weakening because even if the increase in revenue is not huge, there still can be a possibility of improvement. I went for C thinking that if the customer is spending less time reading the book, lesser will be the possibiity for him to buy coffee. Please enlighten.

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Re: The owners of a book store and a nearby coffee [#permalink]

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New post 19 Aug 2015, 04:07
by merger of the business shop owners think that the customers of one store will make the purchase in the other one too. thereby increasing the revenue. so, to weaken their conclusion we should select an option which says that they already share the customers.

Option D says so...

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Re: The owners of a book store and a nearby coffee [#permalink]

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New post 13 Aug 2017, 11:58
Clearly Ans is D

A large majority of the book store's current customer base already frequents the coffee shop.
It means there is no reason for the merger and they may not be able to increase the customers... hence weakens.
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Re: The owners of a book store and a nearby coffee [#permalink]

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New post 13 Aug 2017, 13:02
D is the answer. It weakens the conclusion.

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Re: The owners of a book store and a nearby coffee   [#permalink] 13 Aug 2017, 13:02
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