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# Fish currently costs about the same at seafood stores

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

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27 May 2008, 19:09
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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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Intern
Joined: 10 Apr 2006
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Re: CR-Fish stores [#permalink]

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27 May 2008, 19:51
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E for me. Profit margins would be dictated by price set minus the wholesale price. So the missing link would have to do with the price set.
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Re: CR-Fish stores [#permalink]

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10 Jun 2011, 08:13
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zest4mba wrote:
I don't get how E is the answer

Lets say cost in Eastville was 10$and also in suburbs Due to lower taxes cost became 9$ for the city and remained 10$for suburbs Now profit =Selling Price-Cost Price For city if Selling Price=20 then Profit would be 20-9=11 FOr suburbs Selling Price =20 then Profit would be 20-10=10 Hence Profit for city is higher even if the Selling Price is the same as suburbs Now if I decrease the Selling Price in the city Lets say is 19 then profit would be 19-9=10 so the profit will decrease Am i missing a point here ?? There is nothing wrong with your interpretation. Let's see what question is trying to ask: Question is asking which option will help us weigh the authenticity of author's conclusion. Author's conclusion: Because the city's fish sellers will have to pay lower taxes than sub-urban fish sellers, doing business in the city will be more profitable. E says: Let me check the validity of the conclusion: Evaluation: Whether the city sellers will be forced/obliged to set a price much lower than the sub-urban sellers' price? Ans: Yes!! Really, the conclusion is baseless then because I know I won't make profit if I set up my business in the city, for I will have to sell my fishes at a much lower price. Even though I will pay lower taxes, what's the use if I make less profit on sale. Ans: No!! Wow, that's wonderful. I will surely set up my shop in the city because the conclusion was indeed true. Now, I can sell the fishes at the same price as sub-urban sellers do. Plus, I pay less taxes than them. Surely, I will make more profits. You saw how the evaluation question proposed in the statement E helped us validate author's conclusion. E is the best answer choice. _________________ Intern Joined: 30 Jun 2014 Posts: 22 Concentration: Strategy, General Management GMAT 1: 640 Q50 V26 Followers: 0 Kudos [?]: 5 [3] , given: 178 Re: Fish currently costs about the same at seafood stores [#permalink] ### Show Tags 30 Nov 2014, 21:01 3 This post received KUDOS Got my gmat tomorrow , but lets give this a try . 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 - So wat ? does it tell if the profit of shop keeper within the city inc. ? NOPE (B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city - So wat ? does it tell if the profit of shop keeper within the city inc. ? NOPE (C) The wholesale price of fish is likely to fall in the future - So wat ? does it tell if the profit of shop keeper within the city inc. ? NOPE (D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs - So wat ? does it tell if the profit of shop keeper within the city inc. at the present time ? NOPE, this is a restated premise. (E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores - PERFECT. if the shop keepers decide to dec the SP then the profit = CP-SP will remain equal. ** I am no expert but a piece of advice, CR is basically logical thinking. So dont think too much about wheather its a OFS or iSWAT. Just focus on the conclusion "Conclusion is the king":P CEO Joined: 17 May 2007 Posts: 2959 Followers: 61 Kudos [?]: 601 [1] , given: 210 Re: CR-Fish stores [#permalink] ### Show Tags 28 May 2008, 22:24 1 This post received KUDOS Dont worry I do it all the time Manager Joined: 28 Apr 2008 Posts: 130 Followers: 2 Kudos [?]: 58 [1] , given: 0 Re: CR-Fish stores [#permalink] ### Show Tags 29 May 2008, 03:58 1 This post received KUDOS goalsnr 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. >> out of scope (B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city >> irrelevant (C) The wholesale price of fish is likely to fall in the future >> this would effect suburbian stores also. (D)Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs. >> we are already given this information. (E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores Manager Joined: 19 Feb 2010 Posts: 81 Followers: 2 Kudos [?]: 35 [1] , given: 6 Re: CR-Fish stores [#permalink] ### Show Tags 08 Jun 2010, 06:00 1 This post received KUDOS nice! _________________ Yogesh Agarwal yogeshagarwala@gmail.com CONSIDER AWARDING KUDOS IF MY POST HELPS !!! SVP Joined: 04 May 2006 Posts: 1902 Schools: CBS, Kellogg Followers: 23 Kudos [?]: 1122 [0], given: 1 Re: CR-Fish stores [#permalink] ### Show Tags 27 May 2008, 19:25 D for me! _________________ CEO Joined: 17 May 2007 Posts: 2959 Followers: 61 Kudos [?]: 601 [0], given: 210 Re: CR-Fish stores [#permalink] ### Show Tags 27 May 2008, 23:07 Another E, for reasons mentioned above. Good question +1. Manager Joined: 11 Apr 2008 Posts: 155 Schools: Kellogg(A), Wharton(W), Columbia(D) Followers: 1 Kudos [?]: 65 [0], given: 0 Re: CR-Fish stores [#permalink] ### Show Tags 27 May 2008, 23:10 IMO E too. Director Joined: 18 Feb 2008 Posts: 792 Followers: 21 Kudos [?]: 123 [0], given: 25 Re: CR-Fish stores [#permalink] ### Show Tags 27 May 2008, 23:21 1 This post was BOOKMARKED E, if they will lower the price, they might end up with same profit margin as before. Director Joined: 23 Sep 2007 Posts: 787 Followers: 5 Kudos [?]: 192 [0], given: 0 Re: CR-Fish stores [#permalink] ### Show Tags 27 May 2008, 23:23 D for me If the retail prices were the same in the city and the suburb, then the new tax break would help city stores. And D tells you definitively that the prices has always been the same for city and suburb. In E, what if the price in the city is already lower than in the suburb? Or that the price in the city is already higher than the suburb? In this case, the profit margin is already higher, not just will be higher. VP Joined: 03 Apr 2007 Posts: 1352 Followers: 4 Kudos [?]: 678 [0], given: 10 Re: CR-Fish stores [#permalink] ### Show Tags 28 May 2008, 20:15 1 This post was BOOKMARKED gmatnub wrote: D for me If the retail prices were the same in the city and the suburb, then the new tax break would help city stores. And D tells you definitively that the prices has always been the same for city and suburb. In E, what if the price in the city is already lower than in the suburb? Or that the price in the city is already higher than the suburb? In this case, the profit margin is already higher, not just will be higher. Conclusion: Therefore, in the future, profit margins will be higher at seafood stores within the city than at suburban seafood stores. >>>We can come to teh conclusion when we know about the prices set at the stores within the city and the surban stores. VP Joined: 03 Apr 2007 Posts: 1352 Followers: 4 Kudos [?]: 678 [0], given: 10 Re: CR-Fish stores [#permalink] ### Show Tags 28 May 2008, 20:16 OA is E Director Joined: 23 Sep 2007 Posts: 787 Followers: 5 Kudos [?]: 192 [0], given: 0 Re: CR-Fish stores [#permalink] ### Show Tags 28 May 2008, 21:04 I disagree with the supposed E OA Here is an example: let say the current cost of a fish is$5 including tax

suburbs sell for $10, current profit$5

cities sell for $8, current profit is$3

After $1 tax break it costs suburbs$5 a fish, but only cost cities $4 a fish suburbs sell for$10, suburbs profit will continue to be $5 cities sell for$8, but cities profit will increase to $4 (still lower profit than suburbs) BUT if cities sells for$9.50, cities profit will increase to $5.50 (higher profit than suburbs, BUT still lower selling price) So the lower selling price of the city stores can still generate higher profit than suburb stores. The relative prices of city to suburb stores don't necessary correlate to the actual profit comparison. CEO Joined: 17 May 2007 Posts: 2959 Followers: 61 Kudos [?]: 601 [0], given: 210 Re: CR-Fish stores [#permalink] ### Show Tags 28 May 2008, 22:03 1 This post was BOOKMARKED Mate read the question premise: "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" This means currently the profits are identical. gmatnub wrote: I disagree with the supposed E OA Here is an example: let say the current cost of a fish is$5 including tax

suburbs sell for $10, current profit$5

cities sell for $8, current profit is$3

After $1 tax break it costs suburbs$5 a fish, but only cost cities $4 a fish suburbs sell for$10, suburbs profit will continue to be $5 cities sell for$8, but cities profit will increase to $4 (still lower profit than suburbs) BUT if cities sells for$9.50, cities profit will increase to $5.50 (higher profit than suburbs, BUT still lower selling price) So the lower selling price of the city stores can still generate higher profit than suburb stores. The relative prices of city to suburb stores don't necessary correlate to the actual profit comparison. Director Joined: 23 Sep 2007 Posts: 787 Followers: 5 Kudos [?]: 192 [0], given: 0 Re: CR-Fish stores [#permalink] ### Show Tags 28 May 2008, 22:22 bsd_lover wrote: Mate read the question premise: "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" Thanks, I somehow missed the first sentence. You are right. Director Joined: 23 Sep 2007 Posts: 787 Followers: 5 Kudos [?]: 192 [0], given: 0 Re: CR-Fish stores [#permalink] ### Show Tags 28 May 2008, 22:27 bsd_lover wrote: Dont worry I do it all the time Yes that is true, but you are the only person who explained my overlook. Manager Joined: 24 Jan 2010 Posts: 159 Location: India Schools: ISB Followers: 2 Kudos [?]: 58 [0], given: 14 Re: CR-Fish stores [#permalink] ### Show Tags 07 Jun 2010, 10:20 E for me too.... _________________ _________________ If you like my post, consider giving me a kudos. THANKS! Manager Joined: 15 Apr 2010 Posts: 169 Followers: 4 Kudos [?]: 77 [0], given: 3 Re: CR-Fish stores [#permalink] ### Show Tags 08 Jun 2010, 05:51 E for me too Re: CR-Fish stores [#permalink] 08 Jun 2010, 05:51 Go to page 1 2 3 Next [ 59 posts ] Similar topics Replies Last post Similar Topics: 2 Until about 400 million years ago. fishes-the first true swimmers-were 2 08 Mar 2017, 10:04 The fishing industry cannot currently be relied upon to help the gover 2 16 Dec 2016, 19:51 1 Seafood restaurants in Snare Island generally... 1 02 Oct 2013, 22:21 1 Fish currently costs about the same at seafood stores 5 18 Feb 2016, 03:54 2 Fresh potatoes generally cost about$2 for a 10-pound bag, 7 06 Sep 2016, 09:42
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# Fish currently costs about the same at seafood stores

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