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Senior Manager
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25 Jun 2008, 01:46
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45% (medium)

Question Stats:

65% (02:25) correct 35% (01:28) wrong based on 1194 sessions

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First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
(E) PXC's production costs for its computers were lower last year than they had been the previous year.
[Reveal] Spoiler: OA
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25 Jun 2008, 02:09
I think, the answer is D.
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25 Jun 2008, 03:00
Straight D.
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25 Jun 2008, 09:29
lexis wrote:
First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
- but the number of PXC computers sold remained constant.
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.
- correct
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.
- irrelevant
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
- irrelevant
(E) PXC's production costs for its computers were lower last year than they had been the previous year.
- profit margins are constant, so this can't be the answer.

IMO (B) is correct.
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25 Jun 2008, 12:18
D would be my answer on this.

All the other variables remaining the same as in the year before, number of first time and second-time buyers would decide the final profit margins (lower or higher).

In this case the profits are higher hence number of second time buyers > number of first time buyers.
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25 Jun 2008, 12:48
D
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25 Jun 2008, 12:56
D for me

The question clearly shows that of the bought computers the majority of the computers are replacements as only that way the profit margins would be more and thus D, D shows that the proportion of 1st time buyers is less

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year,
Quote:
although about the same number of PXC computers were sold
and the prices and profit margins for each computer model that PXC sells remained unchanged.
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25 Jun 2008, 22:08
D is OA!
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09 Oct 2011, 02:23
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it was straightforward D...
wats the level of this question
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16 Jan 2012, 07:39
gmatcrook wrote:
D would be my answer on this.

All the other variables remaining the same as in the year before, number of first time and second-time buyers would decide the final profit margins (lower or higher).

In this case the profits are higher hence number of second time buyers > number of first time buyers.

I also agree with D.

But C is also a strong contender because it also tells us that there are more no. of sales of costly computers. But, we can eliminate this because the argument uses the word 'TYPICALLY' in the first statement, which means even first time buyers are also buying costly computers. This fact is reflected only in D but not in C.
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16 Jan 2012, 08:42
+1 for D
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28 Jan 2012, 14:44
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D .Assume that the no of computers sold are the same for both the years .Since the propotion of the number of computers bought by first timers is less last year .It leads to a higher profit since more number of computers are bought by people who are replacing their old computers .
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05 Feb 2012, 21:26
I got my answer as C, but looks like it is wrong here
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13 Feb 2012, 01:56
+1 D
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13 Feb 2012, 15:21
Clear D for me, as well!! The truth is that I got confused with the difference between "last year" and "previous year". I thought it was the same. (Clearly not a native speaker!!)
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15 Feb 2012, 07:22
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First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
- but the number of PXC computers sold remained constant so its not the correct option.
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.
- not relevant question didnt speak about other products.
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. --- this doesnt speak about the raise in profits of PXC
- irrelevant
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
- since first time buyers are smaller the replacement buyers are more and the sales are constant the replacement sales resulted in more profits so correct answer.
(E) PXC's production costs for its computers were lower last year than they had been the previous year.
- profit margins are constant, so this can't be the answer.
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30 Oct 2013, 22:13
Answer (D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.

F = first time computer , Profit Margin = 10 | U = Upgraded computer , Profit Margin = 40

LY (last year) & PY (previous year) computers sold = 10 [Stimulus tells us that # of computers "was about the same"]

This year = 2013, Last Year = 2012, Previous Year = 2011
2012 - Total Profit (LY) = 2 * 10 + 8 * 40 = 340 ---> Proportion of F computer 20%
2011- Total Profit (PY) = 5 * 10 + 5 * 40 = 250 ---> Proportion of F computer 50%

Profit increased 340-250=90 or 9/25 or 36%. Substantial increase in profits with no change in the # of computers sold. because proportion of first time was smaller LY (20%) than the PY (50%)
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10 Nov 2013, 01:25
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Straight D

C is a shell game Answer choice. Look at the shift in the answer choice "competitors" I almost was certain it's was C after couple of second but when I read competitor that clicked aah this one is a trap.
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10 Nov 2013, 02:08
Lets take a look at each choice:

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
The argument states that the same number of PXC computers were sold. (A) Says that first-time computer buyers were more attracted to PXC computers and therefore wants to trick you into thinking that more people bought PXC computers and thus, PXC had a higher profit. However, the argument states that the number of computers sold was the same and thus, whether or not (A) is true is irrelevant.
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.The argument says nothing about other products. The argument is only about computer sales.
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. At first this seems like a contender because it makes you think that more people may have bought a more profitable computer because they were replacing their old computers and the argument states that "first-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models." However, this does not have to be true. Whether or not the buyers previously owned a PXC computer or computer from a competitor is not important.
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
This is the correct answer. It must be true that since the same number of computers were sold that more computers were sold to non-first time buyers.
(E) PXC's production costs for its computers were lower last year than they had been the previous year.Profit margins do not change so this directly contradicts the argument.
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11 Feb 2014, 16:58
If the statements above are true, which of the following is most strongly supported by them?

Conclusion: Last year PXC's profits from computer sales were substantially higher than the previous year
Reasoning: There are two types of computers: low price and high price. Prices have not change, and same number of units were sold. Still, profit is higher. Therefore, the higher price computers sold more this year than last year. Correct answers must be inferred from the stimulus. Incorrect answers are as follows: could be true/likely to be true, exaggerated answers, new information, shell game, or reverse logic

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers. Wrong - This is not true, because stimilus says prices and profit margins for each computer remained unchanged.

(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year. Wrong - New information is provided

(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. Wrong - New information is out of scope.

(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year. Must be true for profit margins to increase.

(E) PXC's production costs for its computers were lower last year than they had been the previous year. Wrong - shell game and not supported by stimulus above. Prices and profits remained unchanged, so costs must have remained unchanged.

IMO D

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