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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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Diamond Enterprises is a store in Apisville that sells specialty luxury items. For several years, Diamond reaped substantial profits and was considering building branch stores in nearby counties. Stibium Industries, for several years the single largest employer in Apisville and the surrounding region, abruptly closed its plant last year, causing widespread unemployment. Only a fraction of the former Stibium workers have found new jobs, and many of these at much lower wages. Early this year, Diamond Enterprises has filed for Chapter 11 bankruptcy, citing the closure of Stibium as one of the primary causes.

Which of the following inferences is best supported by the passage?

A. Diamond Enterprises would have avoided bankruptcy if it had followed through with the plan to build branch stores during its more prosperous years. (We cannot infer this since there is info relating to planning of DE)

B. Stibium's management team had a corporate account with Diamond Enterprises, and ordered several luxury items used in business meetings and to entertain prospective clients.(Even if there was an account, we cannot cite it as a reason for closure.)

C. Diamond's direct competitors, in Apisville and in the surrounding region, are much larger than Diamond, and therefore benefitted substantially from the conditions that arose after Stibium closed. (Out of scope since others benefited does not imply that DE has to close.)

D. The closure of Stibium resulted in a loss of revenue for Diamond Enterprises. (This can be inferred straightly.)

E. After Stibium Industry closed, Diamond Enterprises was the single largest employer in Apisville.(Cannot be inferred.....new info not mentioned in the passage.)
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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Pretty straight question. Although there are two close options to contend for correct answer, one beats the other on the ground of intensity of impact. The weaker option had some assumptions to make it more valuable or to make considerable. The other choice (which I belive is the correct answer) has direct and severe dependency on the conclusion and hence is the right answer.

Thanks,
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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Pre-thinking options :
1. Stibium employees used to buy luxury items from D.E.
2. Stibium used to supply cheap raw materials into D.E.

Which of the following inferences is best supported by the passage?

A. Diamond Enterprises would have avoided bankruptcy if it had followed through with the plan to build branch stores during its more prosperous years.=>does not explain why D.E. failed

B. Stibium's management team had a corporate account with Diamond Enterprises, and ordered several luxury items used in business meetings and to entertain prospective clients.=> This is close, but we are concerned about employees. Management could still be there in the business, passage does not say anything about management.

C. Diamond's direct competitors, in Apisville and in the surrounding region, are much larger than Diamond, and therefore benefitted substantially from the conditions that arose after Stibium closed.=>So competitors can make DE out of the business, but is it related to Stibium employees? No. So this option cannot follow the premises mentioned in the para.

D. The closure of Stibium resulted in a loss of revenue for Diamond Enterprises.=>sounds like the crux of the pre-thinking options

E. After Stibium Industry closed, Diamond Enterprises was the single largest employer in Apisville.=>cannot think of a direct relation with bankruptcy-> this is the time-waster option- the more you try to relate/think the more time you end up wasting

PS. Option B is one of the typical naughty tricks GMAT plays with some questions.

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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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Easy one. For Inference questions, we need to pick a "must be true" option. The closest option to the correct option qualifies for "could be true".
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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If option B was true, it would be included in option D scope. It can only be option D, otherwise you would have two correct answers.
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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This is bad! None of the answer choices seems to be correct to me :cry:

The fight is between B and D-
B: Too specific. May or may not be true. Hence cant infer (but this can definitely be a solid strengthener)
D: Introduces causality. How can i say that X resulted in Y just because X happened before Y !?! Hence cant infer
:? :? :?
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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arhumsid

I think you can infer the causality from D (and also from B).

The causality would be in the folowing order: Diamond Enterprises was doing well->The factory closed->unemployment rose->people stoped buying at Diamond Enterprises->Diamond Enterprises was not doing well anymore->Diamond Enterprises went bankrupt.

D is better because if option B was true, it would be "included in" option D scope (both are about a loss of revenue after the factory closed).
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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Keep a clean order of the facts that the argument gives you, and you will find the answer easily.
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
this is an inference type of questions, and the answer must be 100% true based on the information given.

only answer choice D re-states what actually the argument says.

during the pre-thinking, we might consider that workers of S were clients of DE. now, since most of the workers are left without a job, and since only a minority of workers found jobs, but at lower wages, then they did not continue to buy from DE. thus, the closure of S lead to an economic disaster of the ex-workers, who were clients of DE. Since these clients can no longer afford what they could before, DE now has no clients. thus, the revenue considerably decreased.
B is a tempting one, but since it is an inference question, we need to find an answer choice that does not provide additional, irrelevant, information.
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
himanshujovi wrote:
I dont think this is 600-700 level question. At best it is sub 600.. The only trick I can imagine is test taker getting confused on seeing the very clear cut and obvious answer


At times obviousness of answer choices doesnt make a question tough but the length of a passage surely does. You are right that its starightfwd but it takes at least 1 minute to figure out what the passage says and demands, which makes it 600-700

Hope it helps
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
vards wrote:
Diamond Enterprises is a store in Apisville that sells specialty luxury items. For several years, Diamond reaped substantial profits and was considering building branch stores in nearby counties. Stibium Industries, for several years the single largest employer in Apisville and the surrounding region, abruptly closed its plant last year, causing widespread unemployment. Only a fraction of the former Stibium workers have found new jobs, and many of these at much lower wages. Early this year, Diamond Enterprises has filed for Chapter 11 bankruptcy, citing the closure of Stibium as one of the primary causes.
Which of the following inferences is best supported by the passage?

a.)Diamond Enterprises would have avoided bankruptcy if it had followed through with the plan to build branch stores during its more prosperous years.
b.)Stibium’s management team had a corporate account with Diamond Enterprises, and ordered several luxury items used in business meetings and to entertain prospective clients.
c.)Diamond’s direct competitors, in Apisville and in the surrounding region, are much larger than Diamond, and therefore benefitted substantially from the conditions that arose after Stibium closed.
d.)The closure of Stibium resulted in a loss of revenue for Diamond Enterprises.
e.)After Stibium Industry closed, Diamond Enterprises was the single largest employer in Apisville




DE has filed bankruptcy and cited S as the cause. We know that S closed its plant last year. If we combine both these statements, we get an idea that S used to buy stuff from DE , and now because S is not in business anymore, DE is facing some business loss.

a.)Diamond Enterprises would have avoided bankruptcy if it had followed through with the plan to build branch stores during its more prosperous years. We don't know about this.

b.)Stibium’s management team had a corporate account with Diamond Enterprises, and ordered several luxury items used in business meetings and to entertain prospective clients. But way closure of S was the reason for DE bankruptcy filing. Also, having a corporate account has nothing to do with Bakruptcy filing.

c.)Diamond’s direct competitors, in Apisville and in the surrounding region, are much larger than Diamond, and therefore benefitted substantially from the conditions that arose after Stibium closed. We want to know if there was some negative effect on DE.

d.)The closure of Stibium resulted in a loss of revenue for Diamond Enterprises. Correct answer. That is what we concluded before looking at answer choices.

e.)After Stibium Industry closed, Diamond Enterprises was the single largest employer in Apisville. Reason for bankruptcy?
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]

Official Explanation


The credited answer is (D). We know Diamond had high profits before Stibium closed, and we know it was close to bankruptcy after Stibium closed, citing Stibum's closure as one of the primary causes. There, in some way, as a result of Stibium closing, Diamond lost revenue. Consider the opposite of (D): If Stibium closed, and that caused no revenue loss for Diamond, then how on earth could Diamond cite the closure of Stibium as one of the causes of its plummet from high profits to bankruptcy? The opposite of (D) is a scenario that makes no sense, so (D) is an unavoidable inference, very well supported.

Choice (A) is a tempting answer. Would branches of other Diamond stores in other towns have reaped profits, enough to avoid the bankruptcy mentioned? Perhaps. That's certainly a plausible possibility, but we don't know for sure. If we don't know for sure, it's not a good inference. (A) is incorrect.

Choice (B) is way too specific in the kind of assumptions it makes. It seems that Diamond was getting some kind of revenue from Stibium, but was it the management buying perks? or rank-and-file workers buying treats for themselves? We don't know. Anything that spins a highly specific story is too much to infer strictly from the information in the prompt. (B) is incorrect.

Choice (C) makes too many assumptions --- does this specialty store Diamond have direct competitors in the region? if so, are these competitors larger? was "being larger" an advantage in the economic conditions that resulted from Stibium's closure? There are too many things we don't know, so we can draw a clear inference. (C) is incorrect.

Choice (E) is entirely unfounded. We have no idea how big Diamond is, and we have no idea what other employers Apisville might have. (E) is incorrect.

(D) is by far the best answer.
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
Diamond Enterprises is a store in Apisville that sells specialty luxury items. For several years, Diamond reaped substantial profits and was considering building branch stores in nearby counties. Stibium Industries, for several years the single largest employer in Apisville and the surrounding region, abruptly closed its plant last year, causing widespread unemployment. Only a fraction of the former Stibium workers have found new jobs, and many of these at much lower wages. Early this year, Diamond Enterprises has filed for Chapter 11 bankruptcy, citing the closure of Stibium as one of the primary causes.

Which of the following inferences is best supported by the passage?

Pre-thinking:
We are given a situation in which a store making a lot of revenues closes after the close of a very important store in town. Our task is to link the two events in terms of profits or revenues since we are given that a store went bankrupt.

A. Diamond Enterprises would have avoided bankruptcy if it had followed through with the plan to build branch stores during its more prosperous years.
There is no information that guarantees this outcome. Hence incorrect

B. Stibium's management team had a corporate account with Diamond Enterprises, and ordered several luxury items used in business meetings and to entertain prospective clients.
How does this affect DE? Was this account big enough to oblige DE to bankruptcy? Since we can safely say both yes and no to this answer this choice does not impact the conclusion significantly.

C. Diamond's direct competitors, in Apisville and in the surrounding region, are much larger than Diamond, and therefore benefitted substantially from the conditions that arose after Stibium closed.
Irrelevant. Hence incorrect

D. The closure of Stibium resulted in a loss of revenue for Diamond Enterprises.
This links the bankruptcy with the closure of SI. Note that this answer is more correct than B because it addresses the revenue directly. Hence correct

E. After Stibium Industry closed, Diamond Enterprises was the single largest employer in Apisville.
Irrelevant. Hence incorrect
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
aragonn mikemcgarry Harley1980

Early this year, Diamond Enterprises has filed for Chapter 11 bankruptcy, citing the closure of Stibium as one of the primary causes.

The stimulus states only this much about the relationship between Diamond Enterprises and Stiibium.
Please let me know, how can we infer that Stibium was a client of Daimond Enterprises, not a necessary vendor?
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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Re: Diamond Enterprises is a store in Apisville that sells specialty luxur [#permalink]
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