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Fish currently costs about the same at seafood stores

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Fish currently costs about the same at seafood stores [#permalink]

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New post 10 Oct 2010, 04:55
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Difficulty:

  45% (medium)

Question Stats:

76% (01:21) correct 24% (02:37) wrong based on 42 sessions

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Fish currently costs about the same at seafood stores throughout Eastville and its
surrounding suburbs. Seafood stores buy fish from the same wholesalers and at the
same prices, and other business expenses have also been about the same. But new tax
breaks will substantially lower the cost of doing business within the city. Therefore, in
the future, profit margins will be higher at seafood stores within the city than at
suburban seafood stores.
For the purposes of evaluating the argument, it would be most useful to know
whether.
(A)more fish wholesalers are located within the city than in the surrounding suburbs.
(B) Any people who currently own seafood stores in the suburbs surrounding Eastville
will relocate their businesses nearer to the city
(C) The wholesale price of fish is likely to fall in the future
(D)Fish has always cost about the same at seafood stores throughout Eastville and its
surrounding suburbs.
(E) Seafood stores within the city will in the future set prices that are lower than those
at suburban seafood stores.
[Reveal] Spoiler: OA

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Re: evaluate the argument [#permalink]

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New post 10 Oct 2010, 08:05
raghavs wrote:
Fish currently costs about the same at seafood stores throughout Eastville and its
surrounding suburbs. Seafood stores buy fish from the same wholesalers and at the
same prices, and other business expenses have also been about the same. But new tax
breaks will substantially lower the cost of doing business within the city. Therefore, in
the future, profit margins will be higher at seafood stores within the city than at
suburban seafood stores.
For the purposes of evaluating the argument, it would be most useful to know
whether.
(A)more fish wholesalers are located within the city than in the surrounding suburbs.
(B) Any people who currently own seafood stores in the suburbs surrounding Eastville
will relocate their businesses nearer to the city
(C) The wholesale price of fish is likely to fall in the future
(D)Fish has always cost about the same at seafood stores throughout Eastville and its
surrounding suburbs.
(E) Seafood stores within the city will in the future set prices that are lower than those
at suburban seafood stores.


Conclusion: In the future, profit margins will be higher at seafood stores within the city than at
suburban seafood stores.

Narrowed down between option C and E. Option C statement if true will impact both the city and suburban seafood stores equally. Only option E brings in additional information that helps us further evaluate the argument put forth.
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Re: evaluate the argument [#permalink]

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New post 10 Oct 2010, 10:49
Agree with E

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Re: evaluate the argument [#permalink]

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New post 10 Oct 2010, 13:12
I'd go E...
The fluctuation of earnings and costs affect profit margin.
The stimulus makes a comparison between a suburban fish business and urban fish business and states that their costs are equal. However, a tax break substantially lowers cost of business in the city, which widens the profit margin for the city seafood store.
The conclusion affirms, "in the future profit margins will be higher in the city" but that's only if city restaurants do nothing to affect their earnings. Lowering price could close the differential margin that the tax break creates for the city business. So we'd need to ascertain that the city fish restaurant does not do that in the future.
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Re: Fish currently costs about the same at seafood stores [#permalink]

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New post 18 Feb 2016, 02:49
Hello from the GMAT Club VerbalBot!

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Re: Fish currently costs about the same at seafood stores [#permalink]

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New post 18 Feb 2016, 03:54
If seafood stores within the city will in the future set prices that are lower than those
at suburban seafood stores then the tax breaks will not affect their profit margin much. And so E is the correct answer.
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Re: Fish currently costs about the same at seafood stores   [#permalink] 18 Feb 2016, 03:54
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