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11 Jul 2019, 15:40
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Company X recently bought Company Y. Since the two companies had previously been the only companies manufacturing cardboard containers, Company X now has a monopoly in this particular branch of industry and therefore will probably raise the price of its cardboard containers.
Which of the following statements, if true, would most seriously weaken the claim made above?
(A) An increase in the price of cardboard containers would not necessarily increase the retail price of items packed in these containers.
(B) The cost of lumber is a major determinant of the cost of cardboard containers.
(C) There has been a recent increase in demand for cardboard containers.
(D) Manufacturers of cardboard containers face increasingly stiff competition from manufacturers of plastic containers.
(E) Before Company X bought Company Y, Company X had consistently set the prices of its cardboard containers below the prices set by Company Y.
Which of the following statements, if true, would most seriously weaken the claim made above?
(A) An increase in the price of cardboard containers would not necessarily increase the retail price of items packed in these containers.
(B) The cost of lumber is a major determinant of the cost of cardboard containers.
(C) There has been a recent increase in demand for cardboard containers.
(D) Manufacturers of cardboard containers face increasingly stiff competition from manufacturers of plastic containers.
(E) Before Company X bought Company Y, Company X had consistently set the prices of its cardboard containers below the prices set by Company Y.
11 Jul 2019, 16:46
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Company X recently bought Company Y. Since the two companies had previously been the only companies manufacturing cardboard containers, Company X now has a monopoly in this particular branch of industry and therefore will probably raise the price of its cardboard containers.
Which of the following statements, if true, would most seriously weaken the claim made above?
(A) An increase in the price of cardboard containers would not necessarily increase the retail price of items packed in these containers.
(B) The cost of lumber is a major determinant of the cost of cardboard containers.
(C) There has been a recent increase in demand for cardboard containers.
(D) Manufacturers of cardboard containers face increasingly stiff competition from manufacturers of plastic containers.
(E) Before Company X bought Company Y, Company X had consistently set the prices of its cardboard containers below the prices set by Company Y.
Which of the following statements, if true, would most seriously weaken the claim made above?
(A) An increase in the price of cardboard containers would not necessarily increase the retail price of items packed in these containers.
(B) The cost of lumber is a major determinant of the cost of cardboard containers.
(C) There has been a recent increase in demand for cardboard containers.
(D) Manufacturers of cardboard containers face increasingly stiff competition from manufacturers of plastic containers.
(E) Before Company X bought Company Y, Company X had consistently set the prices of its cardboard containers below the prices set by Company Y.
Initially I thought and was about to mark E but second round of going through options helped me. A doesn't matter, B is an add on but doesn't weaken the conclusion, C is like a fact but you cannot do anything with it, E is true but it doesn't necessarily speak for what company X will do in future may be it kept prices low because of competition (which now it doesn't have) and may be now now it wants to cover the cost of buying company Y. D remains and is the answer
MayankSingh
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11 Jul 2019, 20:44
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Point to note:-
Company X now has a monopoly in this particular branch of industry and therefore will probably raise the price of its cardboard containers
i.e. Monopoly---lead to ----Price Increase
Which of the following statements, if true, would most seriously weaken the claim made above?
(A) An increase in the price of cardboard containers would not necessarily increase the retail price of items packed in these containers. ----Incorrect--talks about only one aspect i.e price increase....
(B) The cost of lumber is a major determinant of the cost of cardboard containers-- Incorrect--Its a major determinant but that doesn't say anything about price increase.
(C) There has been a recent increase in demand for cardboard containers. ---Incorrect---Demand lead to price increase may not be true....
(D) Manufacturers of cardboard containers face increasingly stiff competition from manufacturers of plastic containers. --Correct--- Monopoly not there as there are competitors...
(E) Before Company X bought Company Y, Company X had consistently set the prices of its cardboard containers below the prices set by Y.....Incorrect--Just because prices set were lower doesnt give a reason that price go up , it can be one of the reason but not necessary..
Point to note:-
Company X now has a monopoly in this particular branch of industry and therefore will probably raise the price of its cardboard containers
i.e. Monopoly---lead to ----Price Increase
Which of the following statements, if true, would most seriously weaken the claim made above?
(A) An increase in the price of cardboard containers would not necessarily increase the retail price of items packed in these containers. ----Incorrect--talks about only one aspect i.e price increase....
(B) The cost of lumber is a major determinant of the cost of cardboard containers-- Incorrect--Its a major determinant but that doesn't say anything about price increase.
(C) There has been a recent increase in demand for cardboard containers. ---Incorrect---Demand lead to price increase may not be true....
(D) Manufacturers of cardboard containers face increasingly stiff competition from manufacturers of plastic containers. --Correct--- Monopoly not there as there are competitors...
(E) Before Company X bought Company Y, Company X had consistently set the prices of its cardboard containers below the prices set by Y.....Incorrect--Just because prices set were lower doesnt give a reason that price go up , it can be one of the reason but not necessary..
