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# Denoma, a major consumer-electronics maker, had a sizeable decline in

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Manager
Joined: 02 Nov 2014
Posts: 185
GMAT Date: 08-04-2015
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02 Dec 2015, 05:07
koreye wrote:
my main gripe with option C, and many CR questions, is that you have to make assumptions to arrive at the conclusion. Just because D makes parts for other manufacturers should not in itself explain the loss of revenue, because nothing in the passage or the option indicates that to be the case. You have to assume that thats where the revenue decline results from.

Hi koreye

A resolve the paradox question presents you a paradox or an apparent confusion and asks you to come up with a PLAUSIBLE solution. Now, as I understood from ur query, you can always doubt a solution that is feasible, right? No solution can give you 100% guarantee, which is not even asked to find out. The question asks to find the BEST feasible solution among the choices.
Sorry, if I am getting your query wrong.

Thanks.
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04 Dec 2015, 06:22
binit wrote:
koreye wrote:
my main gripe with option C, and many CR questions, is that you have to make assumptions to arrive at the conclusion. Just because D makes parts for other manufacturers should not in itself explain the loss of revenue, because nothing in the passage or the option indicates that to be the case. You have to assume that thats where the revenue decline results from.

Hi koreye

A resolve the paradox question presents you a paradox or an apparent confusion and asks you to come up with a PLAUSIBLE solution. Now, as I understood from ur query, you can always doubt a solution that is feasible, right? No solution can give you 100% guarantee, which is not even asked to find out. The question asks to find the BEST feasible solution among the choices.
Sorry, if I am getting your query wrong.

Thanks.

Thanks
It was more a comment than a query, but you got it right. It's just that being a lawyer, I just don't like working with "Plausibility". Just not good enough for me lol.
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04 Dec 2015, 08:20
koreye wrote:
Thanks
It was more a comment than a query, but you got it right. It's just that being a lawyer, I just don't like working with "Plausibility". Just not good enough for me lol.

Hi,
I am sorry. I agree that I should develop an eye to tell a comment from a query. I must say, you are in a wonderful profession and I'll look forward to learn from you, for I believe, you must be handling real-life, complex arguments on a regular basis.

Thanks.
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Re: Denoma, a major consumer-electronics maker, had a sizeable decline in  [#permalink]

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12 Sep 2016, 14:15
vaibhav123 wrote:
ChrisLele wrote:
So let’s take apart the argument.

Denoma (D.), a consumer-electronic maker, has seen a decrease in sales in the past year. However, D. provides products to retailers, which saw an increase in the sale of D.’s products. How to account for this?

Well, maybe D.’s profits are not solely determined by the number of its products users are able to sell. Maybe, D. creates parts for products that do not have the D. label on them.

For example, let’s say retailers sold D.s new line of home stereos. Units flew off the shelf. However, D. makes a number of parts for many televisions, which do not have the D. label (let’s say for Sony, Panasonic and the rest) If most of D.’s profits are determined by the sale of televisions, then if televisions had a bad year, D.’s profits will decline. This is the case, even with retailers selling plenty of D’s stereos.

The only answer choice that captures this logic is (C).

Let me know that if that helped!

What is wrong with A)

Their advertisement is cutting into their profit but not necessarily affects their revenue.
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11 Jul 2017, 09:41
Thanks for the crisp explanation

Regards,
Abhishek SInha

thevenus wrote:
Ofcourse C

Let's keep it short and simple, the argument states that:
-Overall revenue of company has declined BUT
-The retail sales has done good business
It means that, the overall decremented revenue is not directly related to the retail sales ONLY.Something else is responsible for the overall sales/revenue decline.

Only C states that a substantial revenue is dependent on something else too ( "A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers.")
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12 Jan 2019, 11:33

Need your help. I am confused between option A and C

I discarded option C for the below reason and went ahead with option A. Let me know yourthoughts

Option C : - A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers.

Components are sold by denoma to other manufacturers. It means, denoma already received the money for the same. If the other manufacturers didnt sell them then this situation shouldnt be affecting denoma. We will have to assume that denoma will receive the money for the components they made only if the other manufacturers sold their respective products. Hence I ruled out C
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Re: Denoma, a major consumer-electronics maker, had a sizeable decline in  [#permalink]

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12 Jan 2019, 15:16
2
pikolo2510, let's break the argument down.

Denoma, a major consumer-electronics maker, had a sizeable decline in sales revenue for its most recent fiscal year. This result appears surprising, because electronics retailers report that although their overall sales were considerably lower than in the previous year, their sales revenue from Denoma models actually grew, largely thanks to some innovative and popular models that Denoma introduced.

Which of the following, if true, does most to explain the apparently surprising result?

(A) Because of the need to educate the public about its new models’ capabilities, Denoma’s advertising spending was higher than normal over the period. -- What does the last portion mean when it says "higher than normal"? Does this mean by a penny, or by \$50 billion? We cannot make this assumption and thus doesn't help our argument.

(C) A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers. -- Ah, so if their profits are deriven from something else, this would resolve the paradox.

Does this help?
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Re: Denoma, a major consumer-electronics maker, had a sizeable decline in  [#permalink]

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16 Jan 2019, 05:14
pikolo2510, let's break the argument down.

Denoma, a major consumer-electronics maker, had a sizeable decline in sales revenue for its most recent fiscal year. This result appears surprising, because electronics retailers report that although their overall sales were considerably lower than in the previous year, their sales revenue from Denoma models actually grew, largely thanks to some innovative and popular models that Denoma introduced.

Which of the following, if true, does most to explain the apparently surprising result?

(A) Because of the need to educate the public about its new models’ capabilities, Denoma’s advertising spending was higher than normal over the period. -- What does the last portion mean when it says "higher than normal"? Does this mean by a penny, or by \$50 billion? We cannot make this assumption and thus doesn't help our argument.

(C) A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers. -- Ah, so if their profits are deriven from something else, this would resolve the paradox.

Does this help?

We are mainly concerned with "Sales Revenue".
Do we really need to bother about an option that talks about advertising? Does it matter what happens to the revenue? Wether they spend it on advertising or something else?

I agree with your above explanation, but was curious if we could eliminate the option in any other way!

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16 Jan 2019, 05:55
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Hi blitzkriegxX,

We cannot eliminate off of the premise you just mentioned. A failed advertising campaign could be expensive and worthless; this would resolve the paradox (revenue down, but sales up).
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Re: Denoma, a major consumer-electronics maker, had a sizeable decline in   [#permalink] 16 Jan 2019, 05:55

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