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# Extensive research has shown that the effects of short-term

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Manager
Joined: 04 Oct 2016
Posts: 123
Location: China
Concentration: Healthcare, Entrepreneurship
WE: Sales (Health Care)
Re: Extensive research has shown that the effects of short-term  [#permalink]

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08 Sep 2017, 20:40
royrijit1 wrote:
The first sentence of the last para states the below:

"So why do companies spend so much on price promotions? Clearly price promotions are generally run at a loss, otherwise there would be more of them. "
Clearly, the author says that the price promotions are not worthy to companies. Had they been, there would be more occurrences of price promotions. From this, we can infer that the answer would be 'B'.

We need to understand that this is a inference question. Hence we must be able to prove the answer by materials stated in the passage.

Hope this helps.

i agree with your reference to "otherwise there would be more of them" but can u shed some light on what is the "bottom line" refer to on earth?
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Manager
Joined: 27 Apr 2011
Posts: 52
Location: India
GMAT Date: 06-13-2017
Re: Extensive research has shown that the effects of short-term  [#permalink]

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04 Oct 2018, 10:26
vwjetty wrote:
Financier wrote:
Can anybody explain the subtle line between these two choises? Am I right thinking that C is correct, but D portraites much bigger picture?

The passage suggests that evidence for price promotions’ “effect on the bottom line” (line 40) is provided by
A the lack of lingering aftereffects from price promotions
B the frequency with which price promotions occur
C price promotions’ inability to attract new customers
D price promotions’ recognizable effect on sales
E the legitimate uses to which management can put price promotions

Thanks.

yeah i went with C on the last one as well. Please explain. Thanks.

The passage suggests that evidence for price promotions’ “effect on the bottom line” (the effect being that they have the companies incur losses – lines 19 – 20) is provided by
A. the lack of lingering aftereffects from price promotions … this being a location based question … lingering aftereffects is something that is a part of para 1 … as per the passage lack of lingering can best explain the fact that the strategy does not have its intended effect … however, it cannot explain the losses incurred
B. the frequency with which price promotions occur …passage confirms that the lesser frequency implies the strategy has the company incurring losses … and the word ‘despite’ just before the phrase ‘effect on the bottom line’ allows one to glean from the context that the phrase refers to the negative effect mentioned earlier in the paragraph which is ‘running at a loss’ … thus CORRECT
C. price promotions’ inability to attract new customers … part of para 1 again … the concerned piece is a part of para 2 … again as per the passage this inability only proves that the strategy did not have it intended effects … not why the company instituting the strategy suffered loss
D. price promotions’ recognizable effect on sales … recognizable effects is something that might be inferred as working in the positive direction for the companies employing the strategy, however, the ‘effect on the bottom line’ is something that works in the negative direction for the company … one cannot thus be the evidence of the other
E. the legitimate uses to which management can put price promotions … again the legitimate uses are something that go in the benefitting direction whereas the ‘effect on the bottom line’ goes in the opposite direction … there is no way that one can be the evidence of the other
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Hope it's clear.
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Manager
Joined: 15 Aug 2016
Posts: 148
Location: India
Concentration: Technology, Operations
GMAT 1: 690 Q49 V35
WE: Operations (Consulting)
Re: Extensive research has shown that the effects of short-term  [#permalink]

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02 Nov 2018, 05:07
2/3
3:48
Chose C for the last answer. Good 700+ passage.
Intern
Joined: 15 Jul 2016
Posts: 19
Location: India
Schools: IIMC PGPEX"20
GMAT 1: 560 Q46 V21
GPA: 2.67
WE: Operations (Manufacturing)
Re: Extensive research has shown that the effects of short-term  [#permalink]

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15 Nov 2018, 07:00
I am not able to understand the Q2?

Can some one explain me, please?

regards
Re: Extensive research has shown that the effects of short-term &nbs [#permalink] 15 Nov 2018, 07:00

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# Extensive research has shown that the effects of short-term

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