It is currently 22 Mar 2018, 14:43

### 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

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Country X imposes heavy tariffs on imported manufactured

Author Message
VP
Joined: 16 Jul 2009
Posts: 1387
Schools: CBS
WE 1: 4 years (Consulting)
Country X imposes heavy tariffs on imported manufactured [#permalink]

### Show Tags

01 Aug 2009, 13:59
1
This post was
BOOKMARKED
00:00

Difficulty:

(N/A)

Question Stats:

100% (00:00) correct 0% (00:00) wrong based on 6 sessions

### HideShow timer Statistics

Country X imposes heavy tariffs on imported manufactured goods. Company Y has determined that it could increase its profits in the long term by opening a factory in Country X to manufacture the goods that it currently produces in its home country for sale in Country X.

For Company Y's determination to be true, which of the following assumptions must also be true?

a Company Y will be able to obtain all the necessary permits to open a factory in Country X.
b Company Y currently produces no goods outside its home country.
c A sustainable market for Company Y's goods currently exists in Country X.
d Company Y's home country does not impose tariffs on imported goods.
e Labor costs in Country X are lower than those in Company Y's home country.

--== Message from GMAT Club Team ==--

This is not a quality discussion. It has been retired.

If you would like to discuss this question please re-post it in the respective forum. Thank you!

To review the GMAT Club's Forums Posting Guidelines, please follow these links: Quantitative | Verbal Please note - we may remove posts that do not follow our posting guidelines. Thank you.

_________________

The sky is the limit
800 is the limit

GMAT Club Premium Membership - big benefits and savings

Manager
Joined: 14 Apr 2008
Posts: 50

### Show Tags

01 Aug 2009, 15:25
c cozthen only it has a reason to go to x
VP
Joined: 16 Jul 2009
Posts: 1387
Schools: CBS
WE 1: 4 years (Consulting)

### Show Tags

01 Aug 2009, 15:46
mostwantedjatt wrote:
c cozthen only it has a reason to go to x

Yes, but Y is looking for profit in the long term, so it´s not necessary a CURRENT market in X. In fact, Y can create that market and reach those profits in the long run...
_________________

The sky is the limit
800 is the limit

GMAT Club Premium Membership - big benefits and savings

Senior Manager
Affiliations: ACA, CPA
Joined: 26 Apr 2009
Posts: 428
Location: Vagabond
Schools: BC
WE 1: Big4, Audit
WE 2: Banking

### Show Tags

02 Aug 2009, 03:28
C is the best answer given the options

Noboru - i think you are assuming too much and thinking beyond the problem.

noboru wrote:
mostwantedjatt wrote:
c cozthen only it has a reason to go to x

Yes, but Y is looking for profit in the long term, so it´s not necessary a CURRENT market in X. In fact, Y can create that market and reach those profits in the long run...

_________________

If you have made mistakes, there is always another chance for you. You may have a fresh start any moment you choose, for this thing we call "failure" is not the falling down, but the staying down.

Director
Joined: 05 Jun 2009
Posts: 726
WE 1: 7years (Financial Services - Consultant, BA)

### Show Tags

02 Aug 2009, 04:19
_________________

Consider kudos for the good post ...
My debrief : http://gmatclub.com/forum/journey-670-to-720-q50-v36-long-85083.html

Senior Manager
Affiliations: ACA, CPA
Joined: 26 Apr 2009
Posts: 428
Location: Vagabond
Schools: BC
WE 1: Big4, Audit
WE 2: Banking

### Show Tags

02 Aug 2009, 06:02
I think A and E are in the same boat. We can go on and on about different factors affecting cost.

what if labor costs are lower but overhead costs are higher?
Key thing driving the whole issue is sales/mkt
_________________

If you have made mistakes, there is always another chance for you. You may have a fresh start any moment you choose, for this thing we call "failure" is not the falling down, but the staying down.

Manager
Joined: 01 Jul 2009
Posts: 129
Location: India
Concentration: Entrepreneurship, Strategy
GMAT 1: 680 Q48 V35
GPA: 3.8
WE: General Management (Retail)

### Show Tags

02 Aug 2009, 09:34
I think A and E are in the same boat. We can go on and on about different factors affecting cost.

what if labor costs are lower but overhead costs are higher?
Key thing driving the whole issue is sales/mkt

C is a good call. no sustainable market no long term profits
_________________

i love kudos consider giving them if you like my post!!

http://gmatclub.com/forum/critical-reasoning-for-beginners-82111.html
QUANT NOTES FOR PS & DS: notes to help you do better in Quant. Click Below
http://gmatclub.com/forum/quant-notes-for-ps-ds-82447.html
GMAT Timing Planner: This little tool could help you plan timing strategy. Click Below
http://gmatclub.com/forum/gmat-cat-timing-planner-82513.html

Senior Manager
Joined: 26 May 2009
Posts: 277

### Show Tags

03 Aug 2009, 20:01
I was dangling between C and E. But couldnt figure out a way to eliminate C or E.

Nice explanation guys ... " long term profit" ---> "sustainable market"
Senior Manager
Joined: 26 Jul 2009
Posts: 325

### Show Tags

03 Aug 2009, 20:26
Tough one.

My explantion: Any business that aims to increase profits has to determine whether there is a market for its product. If no market exists, then you dont even need to bother about relative costs.
Director
Joined: 01 Apr 2008
Posts: 846
Name: Ronak Amin
Schools: IIM Lucknow (IPMX) - Class of 2014

### Show Tags

04 Aug 2009, 10:51
What is OA? C?
Intern
Joined: 30 Jul 2009
Posts: 4

### Show Tags

04 Aug 2009, 16:32
I think the answer is A. without any permits, It can gain the goal.

C : Y has already its market for its products in Contry X, as passage said.
also, sustainable market is not neccessary condition for moving to. Without moving, Y still can access to the market. But profit would be less because of the tarriffs

E : Labor cost is not neccessay condition. other costs may also affects Y's profit
Manager
Joined: 30 May 2009
Posts: 212

### Show Tags

04 Aug 2009, 20:18
I too would go for A. What is the OA, noboru?
Intern
Joined: 15 May 2007
Posts: 19

### Show Tags

05 Aug 2009, 07:10
C it is.

Between C and E, E could be ruled out as labour cost is not the only factor that decides profitability. What if the cost of raw material is higher?? Or any other such factors

On the other hand, If there is no demand for the company Y's products in country X then the company cannot make profits even if the labor cost is lower than Company Y's home country
Intern
Joined: 22 Mar 2008
Posts: 49

### Show Tags

05 Aug 2009, 08:35
C for me
VP
Joined: 16 Jul 2009
Posts: 1387
Schools: CBS
WE 1: 4 years (Consulting)

### Show Tags

06 Aug 2009, 12:00
sdrandom1 wrote:
I too would go for A. What is the OA, noboru?

OA is C.

Good discussion.

Regards,

--== Message from GMAT Club Team ==--

This is not a quality discussion. It has been retired.

If you would like to discuss this question please re-post it in the respective forum. Thank you!

To review the GMAT Club's Forums Posting Guidelines, please follow these links: Quantitative | Verbal Please note - we may remove posts that do not follow our posting guidelines. Thank you.

_________________

The sky is the limit
800 is the limit

GMAT Club Premium Membership - big benefits and savings

Re: Country X   [#permalink] 06 Aug 2009, 12:00
Display posts from previous: Sort by

# Country X imposes heavy tariffs on imported manufactured

Moderators: GMATNinjaTwo, GMATNinja

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.