Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Apr 2711:00 AM EDT
-12:00 PM EDT
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors
Apr 2808:00 AM PDT
-11:00 AM PDT
Whether you are just beginning your MBA journey or fine-tuning your path to a 700+ score, GMAT Day is designed to give you a competitive edge.
15 May 2021, 08:58
Kudos
Bookmarks
A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
71% (01:43) correct
29%
(01:58)
wrong
based on 485
sessions
History
Date
Time
Result
Not Attempted Yet
Combo Cotton Textiles uses gasoline for its energy requirements. Energy costs constitute more than half of the variable costs which make up more than half of the total costs. Reducing the wages, a variable cost, will not help in significantly lowering the total costs. Since coal is 30% cheaper than gasoline, the total costs can be significantly reduced by switching to coal for the company's energy needs. Therefore, by switching to coal, the company can increase it s profits on the production of cotton textile.
Which of the following is an assumption on which the argument based?
A) The amount of coal required is not significantly higher than the amount of gasoline required to produce the same quantity of cotton textile.
B) The cost involved in switching from gasoline-based technology to coal based technology is a one-time cost to be incurred by the company.
C) Profits of the company cannot be increased by adopting any other method than switching to coal for its energy requirements.
D) The market price of cotton textiles is subject to frequent fluctuations.
E) The quality of cotton textile produced by using coal 1s the same as that produced when using gasoline.
Which of the following is an assumption on which the argument based?
A) The amount of coal required is not significantly higher than the amount of gasoline required to produce the same quantity of cotton textile.
B) The cost involved in switching from gasoline-based technology to coal based technology is a one-time cost to be incurred by the company.
C) Profits of the company cannot be increased by adopting any other method than switching to coal for its energy requirements.
D) The market price of cotton textiles is subject to frequent fluctuations.
E) The quality of cotton textile produced by using coal 1s the same as that produced when using gasoline.
21 May 2021, 02:43
Kudos
Bookmarks
Premise1: cost of gasoline is high + reducing wage is not helpful
Premise2: coal is cheaper than gasoline
Conclusion: if company uses coal rather than gasoline, it will be profitable.
A) The amount of coal required is not significantly higher than the amount of gasoline required to produce the same quantity of cotton textile. -Yes, if the amount of coal is higher than the amount of gasoline, the cost will not be reduced.
B) The cost involved in switching from gasoline-based technology to coal based technology is a one-time cost to be incurred by the company. - No, technology is not mention
C) Profits of the company cannot be increased by adopting any other method than switching to coal for its energy requirements. No, out of scope we need to stick with the conclusion
D) The market price of cotton textiles is subject to frequent fluctuations. No, the selling-price is not mentioned, we talk about the cost.
E) The quality of cotton textile produced by using coal 1s the same as that produced when using gasoline. No, we need to stick with the cost, not the quality
Premise2: coal is cheaper than gasoline
Conclusion: if company uses coal rather than gasoline, it will be profitable.
A) The amount of coal required is not significantly higher than the amount of gasoline required to produce the same quantity of cotton textile. -Yes, if the amount of coal is higher than the amount of gasoline, the cost will not be reduced.
B) The cost involved in switching from gasoline-based technology to coal based technology is a one-time cost to be incurred by the company. - No, technology is not mention
C) Profits of the company cannot be increased by adopting any other method than switching to coal for its energy requirements. No, out of scope we need to stick with the conclusion
D) The market price of cotton textiles is subject to frequent fluctuations. No, the selling-price is not mentioned, we talk about the cost.
E) The quality of cotton textile produced by using coal 1s the same as that produced when using gasoline. No, we need to stick with the cost, not the quality
28 Sep 2022, 07:01
Kudos
Bookmarks
Seems like an unofficial question with several assumptions. I feel E is a legitimate candidate - the argument is concerned with profits and not costs. Poor quality can lead to poor prices. Poor prices can decrease profitablity.
