GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 14 Nov 2018, 01:15

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

## Events & Promotions

###### Events & Promotions in November
PrevNext
SuMoTuWeThFrSa
28293031123
45678910
11121314151617
18192021222324
2526272829301
Open Detailed Calendar
• ### \$450 Tuition Credit & Official CAT Packs FREE

November 15, 2018

November 15, 2018

10:00 PM MST

11:00 PM MST

EMPOWERgmat is giving away the complete Official GMAT Exam Pack collection worth \$100 with the 3 Month Pack (\$299)
• ### Free GMAT Strategy Webinar

November 17, 2018

November 17, 2018

07:00 AM PST

09:00 AM PST

Nov. 17, 7 AM PST. Aiming to score 760+? Attend this FREE session to learn how to Define your GMAT Strategy, Create your Study Plan and Master the Core Skills to excel on the GMAT.

# Fish currently costs about the same at seafood stores throughout Eastv

Author Message
TAGS:

### Hide Tags

Intern
Joined: 30 Aug 2009
Posts: 19
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

24 Jun 2010, 01:48
(You're missing the tax deduction.)

But that's not really relevant. The conclusion is, that profit margins will be higher. To assess whether that's true, it would help to know if city stores reduce there prices to keep the profit margin the same (since they have lower costs). If they do, the conclusion is challenged in that profit margins won't be higher in the city.
Senior Manager
Status: Fighting on
Joined: 14 Mar 2010
Posts: 290
WE 1: SE - 1
WE 2: Engineer - 3
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

13 Aug 2010, 05:28
E for me as that's the only choice that is important to consider in evaluating the argument. If the price of fish lowers the profit margin will be impacted.

Posted from my mobile device
Intern
Joined: 20 Apr 2011
Posts: 28
Location: United Kingdom
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 02:28
E for me as well.
Good question realy.
Intern
Joined: 04 Jun 2011
Posts: 30
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 06:17
great stuff all around. have a great friday everyone - lets all kill the GMAT prep this weekend. 20+ hours!
Manager
Joined: 09 Feb 2010
Posts: 51
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 06:37
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 ??
Retired Moderator
Joined: 20 Dec 2010
Posts: 1829
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 07:13
4
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 Jul 2009
Posts: 16
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 07:36
Because it's all about the profit margin, answer explicitly has to state the difference in either price (taking cost to do business is same) or cost (taking price is same) for those 2 locations.

(A) More fish wholesalers are located within the city than in the surrounding suburbs. No Price or Cost
(B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city. No Price or Cost
(C) The wholesale price of fish is likely to fall in the future Still NO
(D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs Still NO
(E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores BINGO!!!
Manager
Joined: 09 Feb 2010
Posts: 51
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 10:24
thanks a lot fluke !! Your explanation is spot on !!

I am reading POWERSCORE BIBLE and i bet this way of approaching the questions must have come from there. I still have to read the chapter "Evaluate the argument"

thanks !!
Retired Moderator
Joined: 20 Dec 2010
Posts: 1829
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 10:33
zest4mba wrote:
thanks a lot fluke !! Your explanation is spot on !!

I am reading POWERSCORE BIBLE and i bet this way of approaching the questions must have come from there. I still have to read the chapter "Evaluate the argument"

thanks !!

you won the bet buddy.... a lot of it is POWERSCORE CR BIBLE's gift indeed...
_________________
Manager
Joined: 28 Feb 2011
Posts: 63
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

10 Jun 2011, 13:45
E for me..
Have a nice and productive weekend everyone.
_________________

Fight till you succeed like a gladiator..or doom your life which can be invincible

Intern
Joined: 01 Jan 2011
Posts: 18
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

16 Jun 2011, 06:07
tough one for me to do within a minute n half...i fell for D..
thanks guys to point out it as E...good learning
_________________

_________________________
Try and you will succeed !

VP
Status: There is always something new !!
Affiliations: PMI,QAI Global,eXampleCG
Joined: 08 May 2009
Posts: 1041
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

16 Jun 2011, 18:04
E if the prices are set low then profit margin may not increase.Hence the OA.
Manager
Status: Bunuel's fan!
Joined: 08 Jul 2011
Posts: 174
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

16 May 2012, 10:21
Btween C and E as contenders, I picked E- the most sound answer.
Intern
Joined: 11 Jun 2012
Posts: 4
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

02 Jul 2012, 09:26
The answer for me is E because if the price is same in Eastville and its suburbs and in spite of the low taxes in the city the seafood stores do not lower their price then why would customer from suburbs come to to the city when they can buy it near their homes at the same price. So for the argument to hold true, we need to know if the price of the fish would be priced lower.
Intern
Joined: 01 Jun 2012
Posts: 6
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

03 Jul 2012, 02:04

For ensuring the argument, one should identify whether the purchasing price of fish will remain same or tumble due to the market mechanism like buyer compete one with another for private benefit if there is opportunity for decreasing the price.
For example
Previous: city \$ 50, suburban \$50 (equal margin 15)
Future: city \$40, suburban \$ 50 (equal margin 15)
Intern
Joined: 10 Oct 2011
Posts: 47
Location: Korea, Republic of
Concentration: Finance, Strategy
GMAT Date: 08-16-2012
GPA: 3.05
WE: Engineering (Energy and Utilities)
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

03 Jul 2012, 05:40
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

My 2 cents,

For an evaluation problem like this, the answer choice should be able to either strengthen or weaken the argument.

Choice D,
if assuming true, the conclusion will be strengthened. -> Profit margin in the city will be increased.

Then,
revert the choice D -> Fish hasn't always cost about the same at blah-blah.
if assuming true, you don't know whether the cost in city is less or more than the ones in the suburbs.
because there are two possible cases for the fish
1) \$ in city > \$ in suburb
2) \$ in city < \$ in suburb

Choice E,
Either you revert the choice or you assume the choice to be true, the conclusion will be either strengthened or weakened.

Choice E wins.

Please correct my reasoning if wrong.
_________________

Luck is the additional surplus on the way to one's constant effort.

Manager
Joined: 28 Jul 2011
Posts: 186
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

03 Jul 2012, 07:45
I will vote for E because

question is asking to "evaluating the argument" - when u evaluate an argument we generally weaken the conclusion and the answer choices are Premises

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

Premise 1: new tax breaks will substantially lower the cost of doing business within the city.
premise 2: Fish currently costs about the same throughout Eastville and its surrounding suburbs

(A) More fish wholesalers are located within the city than in the surrounding suburbs
--> Out of scope - not talking about number of wholesales

(B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city
--> Out of scope ardument doesnot talk about relocating doesnot impact out conclusion

(C) The wholesale price of fish is likely to fall in the future
--> already a premise cannot usee it again

(D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs
--> already a premise cannot usee it again

(E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores
--> if they set prices that are lower, then will weaken the conclusion of higher profit margins

hope that helps
Intern
Joined: 04 Apr 2013
Posts: 13
Concentration: Finance, Economics
GPA: 3
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

14 Jun 2013, 04:58

It's out of D or E for sure, BUT..

Question states, 'Therefore, in the future,'.. so we're looking ahead, not at past prices which is why D is incorrect. It is not relevant that historically prices are the same in the city and the suburbs.

Looking at the effect the tax break will have going forward i.e. in future, hence E.
Manager
Joined: 19 Oct 2010
Posts: 193
Location: India
GMAT 1: 560 Q36 V31
GPA: 3
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

22 Jun 2013, 05:17
This one's an E. And this is why:

(A) More fish wholesalers are located within the city than in the surrounding suburbs
Does not affect the conclusion in any way.

(B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city
Nope. Irrelevant.

(C) The wholesale price of fish is likely to fall in the future
This comes close, but is too isolated to one part of the conclusion.

(D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs
Again worded in such a way that seems to tackle the argument and can seem closer than C, and therefore can be misleading. It's incorrect because it talks about the past not the future.

(E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores
This is the one! Knowing this will ascertain whether profit margins will be higher or will remain the same.
_________________

petrifiedbutstanding

Current Student
Joined: 17 Jan 2012
Posts: 13
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

### Show Tags

23 Jun 2013, 17:20

The conclusion of the passage says that the profit margins in the city would be higher compared to that of the suburbs due to the tax breaks in the city.

Hence, the most important information that we would need to know to determine the profits would be how the prices are affected in the city (or the suburbs) after this change. If the prices are lowered in the city than the profit margins would reduce. If the prices in the suburbs have been reduced to match the margins in the city, then profit margin in the city would remain equal to that of the suburbs.

Giving 'E' as the option.
Re: Fish currently costs about the same at seafood stores throughout Eastv &nbs [#permalink] 23 Jun 2013, 17:20

Go to page   Previous    1   2   3    Next  [ 55 posts ]

Display posts from previous: Sort by