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Country X imposes heavy tariffs on imported manufactured

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Re: Country X imposes heavy tariffs [#permalink]

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New post 20 Jan 2010, 15:17
My answer is C. Company Y's aim is to increase profit in long terms.
It can do so if and only if it has got sustainable market in country X.

E is incorrect since argument doesn't mention anything about the labor cost.

What's the OA?

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New post 21 Jan 2010, 09:33
Option E.If high labor costs offset the gains made by avoiding import duties,there is no real benefit.

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Re: Country X imposes heavy tariffs [#permalink]

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New post 21 Jan 2010, 09:57
IMO C ; if there is no market for goods produced in a factory, there will be no profit

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Re: Country X imposes heavy tariffs [#permalink]

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New post 06 Feb 2010, 08:20
I do not agree with the OA if it is C. C is already stated in the passage.

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.

Company Y does already has a market in country X and it is planning to increase the profit. Therefore, C is already in the passage.

I think answer must be A. Let's negate A.....

A - Company Y will be able to obtain all the necessary permits to open a factory in Country X.

Negate A - Company Y will not be able to obtain all the necessary permits to open a factory in Country X.

If Y didn't able to get all necessary permits then it may open and may not open the factory in X. Conclusion fails apart and therefore, A must be the answer.

Please correct me if I am wrong.

What is the source of the answer and what is the OE?

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Re: Country X imposes heavy tariffs [#permalink]

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New post 06 Feb 2010, 10:50
IMO --- C
Current scenario :

Comapny Y is currently making profit when goods are imported and sold in country X . Since the import duties/tarifffs are very high, profit of company Y is low. So inorder to avoid import duties it plan to localize the manufacturing process.....but with the assumption that labour cost shouldnt offset the benefit derived from saving import duties.

sustainability is out of scope of the stem ......(however in the long run is does mentioned but main point of the stem is about increasing profit)

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Re: Country X imposes heavy tariffs [#permalink]

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New post 09 Feb 2010, 07:21
My answer is C, but I thought about A as well.

E is not an answer: low labor cost alone would not guarantee low production cost. What if raw material is more expensive because of a duty/tax/high demand.

A is not an answer: it is very basic requirement and true, but maybe the company does not need a permit for inside production. I eliminated it because it did not fit in with the 'increase its profits in the long term' part.

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 13 May 2011, 20:24
negating C clearly crosses the conclusion.
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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 13 May 2011, 20:44
although A is very pealing but C is a better answer. however, i dont think this is an official question, since the assumption you are making needs a little bit of imagination

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 13 May 2011, 21:16
i think the question is nonsensical and from some absurd and unreliable source.
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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 13 May 2011, 21:28
garimavyas wrote:
i think the question is nonsensical and from some absurd and unreliable source.

I do agree with you, since any way i think about it, one can not really fully eliminate answer choice A and you need to stretch to reach C

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 04 Mar 2012, 20:12
Hi,

Could someone tell the answer for this and also explain it,

Thanks

Ravi

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 04 Mar 2012, 23:08
profit = sales - cost

cost has many component out of which 1 is mentioned in stimulus (import tariff ). thus any valid assumption here could be sales price would remain as high as previously . any other factors that would come under cost (like price of raw materials, machinery labor )would remain same or get lowered in country X .

Option E mention abt cost of labor and hence seems like a valid choice

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 04 Mar 2012, 23:15
after going thru the explanation choice A seems like correct option. Negating both A and E

Negating A Company Y will NOT be able to obtain all the necessary permits to open a factory in Country X. thus conclusion abt increased profit falls apart.

Negating E Labor costs in Country X are NOT lower than those in Company Y’s home country. Even if they are same in two countries, profit in setting facotry in country X could still result in higher profit due to saving on import tariff. hence conclusin can still be correct.

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 05 Mar 2012, 00:13
I think the correct answer is C because if there is no sustainable market for Company Y’s goods currently existing in Country X the company's determination to increase profits is impossible to achieve.
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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 05 Mar 2012, 00:19
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.


Between C and E its a clear E. The reason is the C is not even an assumption, its a fact stated in the stimulus. "the goods that it currently produces in its home country for sale in Country X. "

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Re: Country X imposes heavy tariffs [#permalink]

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New post 07 Mar 2012, 00:52
reply2spg wrote:
I do not agree with the OA if it is C. C is already stated in the passage.

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.

Company Y does already has a market in country X and it is planning to increase the profit. Therefore, C is already in the passage.

I think answer must be A. Let's negate A.....

A - Company Y will be able to obtain all the necessary permits to open a factory in Country X.

Negate A - Company Y will not be able to obtain all the necessary permits to open a factory in Country X.

If Y didn't able to get all necessary permits then it may open and may not open the factory in X. Conclusion fails apart and therefore, A must be the answer.

Please correct me if I am wrong.

What is the source of the answer and what is the OE?

completely agree with that post
please explaine what is wrong with that reasoning?

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 18 Mar 2012, 04:34
IMO E.

If the labor cost in country X is more than Y's country then this it will weaken the conclusion.

i think C would be right if it would have stated
"A sustainable market for Company Y’s goods WILL exists in Country X."

Correct me if i m wrong.

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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 18 Mar 2012, 21:31
shadabkhaniet wrote:
IMO E.

If the labor cost in country X is more than Y's country then this it will weaken the conclusion.

i think C would be right if it would have stated
"A sustainable market for Company Y’s goods WILL exists in Country X."

Correct me if i m wrong.

thanks


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?

C.A sustainable market for Company Y’s goods currently exists in Country X.
E.Labor costs in Country X are lower than those in Company Y’s home country.


C is correct.
negate E. --> Labor costs in Country X are not lower than those in Company Y’s home country.
okay now this thing doesnt alters the conclusion. suppose the inflated tariffs that Y had to pay=200
labor cost in Y=50
labor cost in X=60
THEN also Y is in profit and its conclusion stands of increased profit.

hence for this case the negated assumption doesnt alters the conclusion. Also by argument we cant deduce anything regarding the labor cost and increased tariff, hence E is basically does nothing to the conclusion.

hope this helps..!!
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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 18 Jan 2013, 22:18
Country Y pays tariff for their exported goods to Country X (or imported goods of Country X from Y)...
Country Y plans to manufacture in Country X and feels that will increase profits...

C and E seems to be confusing for others... BUT Labor Costs is only one of the many possible factors to contribute to decrease in profits... The argument did not mention exactly possible factors that will contribute to increase profits... BUT (C) is a basic requriement to making sales... to have a sustainable market.. If there is no such, then there is no long-term profitability..

Answer: C
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Re: Country X imposes heavy tariffs on imported manufactured [#permalink]

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New post 28 Aug 2013, 22:25
jaituteja wrote:
Hi pqhai,

Can you help me with this one.

country-x-imposes-heavy-tariffs-on-imported-manufactured-87003-20.html

I am confused b/w A,C and E.


Hi Jai

I'm happy to help.

ANALYZE THE ARGUMENT:

Fact: Country X imposes heavy tariffs on imported manufactured goods.
Conclusion: 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.

KEY words: “profits the long term”. If Y wants to make profits in the long term, it MUST be able to sell its products. If Y can't sell its products, the strategy will fail.

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

ANALYZE EACH ANSWER:

Company Y will be able to obtain all the necessary permits to open a factory in Country X.
Wrong. Obtain all permits does NOT guarantee that Y can sell products and have long term profits. Selling products does not depend on acquiring permits ONLY.

Company Y currently produces no goods outside its home country.
Wrong. It’s fact. B cannot be the assumption. Clearly, fact is not an assumption.

A sustainable market for Company Y's goods currently exists in Country X.
Correct. Key word is “sustainable market”. C means customers in country X are willing to buy Y’s goods for long term. That is the key for Y’s dermination to be true.

Company Y's home country does not impose tariffs on imported goods.
Wrong. Out of scope. The argument does not talk about the tariff policies in country Y.

Labor costs in Country X are lower than those in Company Y's home country.
Wrong. Quite Tempting. Labor costs is just one of many costs involving the manufacturing process. What if labor costs are lower in Country X, but other costs such as rent, electricity, insurances, etc… are higher than those in Country Y. Thus cost of good sold of Y’s goods is high, making prices for Y’s good not competitive.

Hope it helps.
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Re: Country X imposes heavy tariffs on imported manufactured   [#permalink] 28 Aug 2013, 22:25

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