During the late seventies when Japan was rapidly expanding its share o

Question

Competition Mode Question

During the late seventies when Japan was rapidly expanding its share of the American auto market, GM surveyed owners of GM cars and asked them whether they would be more willing to buy a large, powerful car or a small, economical car. Seventy percent of those who responded said that they would prefer a large car. On the basis of this survey, GM decided to continue building large cars. Yet during the '80s, GM lost even more of the market to the Japanese."

Which one of the following, if it were determined to be true, would best explain this discrepancy?

A. Only 10 percent of those who were polled replied.

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese.

C. The surveyed owners who preferred big cars also preferred big homes.

D. GM determined that it would be more profitable to make big cars.

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey

Bunuel · Accepted Answer

Official Explanation

Only two answer-choices have any real merit—(A) and (E). The argument generalizes from the survey to the general car-buying population, so the reliability of the projection depends on how representative the sample is. At first glance choice (A) seems rather good, because 10 percent does not seem large enough.
However, political opinion polls typically are based on only .001 percent of the population. More importantly, we don’t know what percentage of GM car owners received the survey. Choice (E), on the other hand, points out that the survey did not represent the entire public, so it is the answer.

The other choices can be quickly dismissed. Choice (B) simply states that Ford made the same mistake that GM did. Choice (C) is irrelevant. Finally, choice (D), rather than explaining the discrepancy, would give even more reason for GM to continue making large cars.

exc4libur · Answer

ARGUMENT
  GM conducted a survey in which those who replied preferred large cars;
  GM decided, after the survey, to continue building large cars;
  GM lost even more market share to Japanese manufacturers.

A. is 10% of resp. enough to decide? this does not explain the paradox;
B. irrelevant;
C. irrelevant;
D. irrelevant;

Ans (E)  the results of the survey were skewed towards large car owners.

chaitralirr · Answer

During the late seventies when Japan was rapidly expanding its share of the American auto market, GM surveyed owners of GM cars and asked them whether they would be more willing to buy a large, powerful car or a small, economical car. Seventy percent of those who responded said that they would prefer a large car. On the basis of this survey, GM decided to continue building large cars. Yet during the '80s, GM lost even more of the market to the Japanese."

Which one of the following, if it were determined to be true, would best explain this discrepancy?

A. Only 10 percent of those who were polled replied.

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese.

C. The surveyed owners who preferred big cars also preferred big homes.

D. GM determined that it would be more profitable to make big cars.

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey.

Stimulus:  GM motors performed a survey to understand the customer needs and post survey found that customers want big cars. GM motors continued to manufacture big cars and still they weren't doing good in terms of sale .

IMO E as it explains that the voter population who voted choose their preference rather than the true market choice. so though they manufactured as per market needs it still could not do good in sales.

Brucewayne00726 · Answer

I'm bit confused between A and E but I'm going with option A. As option A tells us that survey didn't had the complete data as only 10% of the car owner replied to survey.

PTD1995 · Answer

Option E

A) Although it seems good, it is not indicative. There are many studies which rely on very small samples

B) No relationship with the conclusion. Just states that other firm made the same error

C) Irrelevant

D) It does not explain discrepancy, but strengthens GM making larger cars

E)  Correct . A sample is not representative of the whole population

Archit3110 · Answer

Conclusion
On the basis of this survey, GM decided to continue building large cars. Yet during the '80s, GM lost even more of the market to the Japanese."

IMO A
Only 10 percent of those who were polled replied.

During the late seventies when Japan was rapidly expanding its share of the American auto market, GM surveyed owners of GM cars and asked them whether they would be more willing to buy a large, powerful car or a small, economical car. Seventy percent of those who responded said that they would prefer a large car. On the basis of this survey, GM decided to continue building large cars. Yet during the '80s, GM lost even more of the market to the Japanese."

Which one of the following, if it were determined to be true, would best explain this discrepancy?

A. Only 10 percent of those who were polled replied.

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese.

C. The surveyed owners who preferred big cars also preferred big homes.

D. GM determined that it would be more profitable to make big cars.

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey

Posted from my mobile device

madgmat2019 · Answer

A. Only 10 percent of those who were polled replied.......OUT OF SCOPE

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese......looking at a similar situation doesnt explains the descripancy

C. The surveyed owners who preferred big cars also preferred big homes.....IRRELEVANT

D. GM determined that it would be more profitable to make big cars......IRRELEVANT

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey........this explains the reason of discrepancy as not covering all the people for the survey.

OA:E

ostrick5465 · Answer

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese.
Eliminate B because this explanation doesn't solve the missing link between the result of the survey and the loss in the market of GM.

C. The surveyed owners who preferred big cars also preferred big homes. 
Eliminate C because there is no relation between preferring big cars, big homes and buying a small car in reality.

D. GM determined that it would be more profitable to make big cars.
Option D there is no relation between profitability and GM's loss in the market. => Eliminate

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey
There are only rates that are not sufficiency. We don't know how many people who wanted big cars and how many people who wanted small cars.
Eliminate E

A. Only 10 percent of those who were polled replied.
10% percent of owners of GM cars were polled replied maybe not enough data to make a decision.
 => Choice A

satya2029 · Answer

Let the total people surveyed is 100
according to GM survey 70 people prefer big cars 30 others
but if we were to resolve this then we would have to present something in the line so that we can say that GM overestimated the numbers.
What E says
0.8X(big cars)+0.4Y(small cars)=100
but according to the survey 70 people prefer big cars
0.8X=70
X=87.5
So GM started building cars by taking the preference of the 87 people instead 70. 
E:)

mkeshri185 · Answer

How can E be right? We dont know the population share of Large and Small cars. So how can we determine on the basis of percentage solely? It says 80% of the Large cars owners responded and 40% of small cars owners responded. But what if Large cars' owners population is relatively large enough to shadow the small car owners? Lets say 10 lakh people have large cars and only 1 lakh people have small cars and out of 10 lakhs 80% responded which is 8 lakh whereas only 40% of small cars responded which is 40 thousands. So Replies included 8 lakh large car owners and 40 thousands small car owners. Now even if the small car owners responded 100% that would only make 1 lakh votes in its favour which is still far less than Large cars 8 lakh respondent rest aside the rest 20% share of large car users.

This definitely doesn't help us to justify anything unless we know the relative ownership of both the variety.

Option A seems more better bcz it already says only 10% responded so we can assume to be very least that the data is inaccurate.

This definitely doesn't help us to justify anything unless we know the relative ownership of both the variety.

Option A seems more better bcz it already says only 10% responded so we can assume to be very least that the data is inaccurate.

DmitryFarber · Answer

Keep in mind that we know everything in the text is true; we're just trying to figure out WHY. So don't worry about proving anything or building contrary cases. We just need an answer that makes this data make sense. One way for that to happen is for the data to come from a biased sample. If fans of large cars were disproportionately represented in the sample, GM's poll results may not have accurately reflected the true level of demand for large cars. That might explain why the company continued to lose market share.

Also, the numbers you're using don't reflect all the data we're given in the prompt and in E. Let's say 200 people responded to the survey. The text said 70% of respondents favored large cars, so let's call that 140 people for large and 60 people for small. Then E tells us that 80% of those who wanted large cars and 40% of those who wanted small cars responded. Based on our numbers, that would be 140/0.8 = 175 people for large and 60/0.4 = 150 people for small cars. No matter what the real numbers are, the proportion must be the same: for every 325 GM owners, 175 prefer large and 150 prefer small. So while large still had the majority, E tells us that the poll got the level of demand wrong, placing it at 70% rather than ~54%.

Meanwhile, A just tells us that not everyone responded, but it doesn't give us any reason to suspect that the poll results were biased. After all, what poll is ever based on 100% participation? Sure, A leaves open the possibility that the poll was at fault, but it doesn't give us any particular reason to suspect that it was, beyond the discrepancy that we're trying to explain in the first place.

During the late seventies when Japan was rapidly expanding its share o

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

During the late seventies when Japan was rapidly expanding its share o

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards