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

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

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23 Jun 2013, 18:20

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

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24 Jun 2013, 11:46
Yes, the thinking as you go through (E) to determine whether it's a critical variable:

Step 1: Figure out the two states of the answer choice

(1) City prices will be LOWER than suburban prices
(2) City prices will NOT be lower than suburban prices (perhaps same price, OR higher)

If (1), this means lower profit margin. The profit margin gained through tax breaks in the city is offset. No change in profit margin potentially -- weakens argument
If (2), city prices are at least the same or higher. If the same, then profit margin will be higher (strengthens argument). If city prices higher, then profit margin even higher (strengthens argument).

Using the gmatpill cr framework approach for evaluate questions, we found a critical variable where in one state it weakens the argument, in the other it strengthens. This it's "useful to know" to help us evaluate the argument.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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26 Sep 2014, 02:37
Clear E.

Conclusion: profit margins will be higher in the city than in suburbs.

In this argument is being assumed that everything stays the same, except for the tax break in the city. Thus, we have to ascertain whether this is true or not.

(A) More fish wholesalers are located within the city than in the surrounding suburbs
It does not help to know whether something different from tax break can distinguish city and suburban seafood stores
(B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer
to the city
Any people... Typical trap
(C) The wholesale price of fish is likely to fall in the future
This would affect seafood stores in both city and suburbs
(D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs
Typical trap: talking about an uncertain past that nothing has to do with the issue at hand
(E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores
CORRECT: now we have something that could change -prices- and thus the effect of the tax break could be neutralized

Hope it helps
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Joined: 23 Apr 2013
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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16 Oct 2014, 01:06
You need the selling price for calculating the margin. D only talks about cost. Also, D is redundant as it is a rephrase of an info already given in the stem of the question.

E is the only one that talks about the selling price.

mohansrinivas wrote:
My answer would be D. Profit margin is nothing but ( Profit / revenue ) * 100.
If the fish selling stores maintain the same price, then certainly profit margin increases.
I am not convinced with the answer choice 'E'.
Could anyone explain me why the answer is not 'D'.

Agreed, but when we see choice 'E', maybe that Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores and also lower than the benefit Seafood stores within the city got from price cut and thus lower profit margins in the city than in suburbs , OR maybe they just lower the prices by amount greater than the benefits they get from tax cuts, then they have lower profit margins in the city than in suburbs. OR In case Seafood stores within the city will in the future set prices that are HIGHER than those at suburban seafood stores, then it is definite Yes. So answer choice e is not a definite answer. Where as D given that it reiterates Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs plus the lower taxes makes it higher margin business.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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30 Nov 2014, 21:01
3
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
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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26 Mar 2017, 06:16
E and D both are contenders - E is more precise saying about future event so IMO E is better option.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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01 Apr 2017, 06:27
I guess ans should be E. My reasoning is mentioned below -

E. Whether Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores.

Every evaluate question has two directions 'yes' or 'No'. Each ans should either strengthen or weaken the argument.

So if we take the ans of the above question 'yes' that means if 'Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores', so in that case the conclusion of the argument is weakened because in that case the Seafood stores in city might fail to maintain the higher profit margin than the seafood stores in suburb area.

if we take the ans of the above question 'No', the author's argument is strengthened, So 'E' should be the ans.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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02 Jul 2017, 06:38
profit margins = total revenues - total costs of doing business
E is correct because E allows stores in the city are more attractive to customers, and hence have more profit margins in the end.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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03 Jul 2017, 00:53
Lets see what the argument means .
When all the prices from wholesalers to business are same, then the cost store within and outside the city have same profitability .
But a new tax is implemented in city that will reduce the cost of doing business in city and because of that profit margins of the stores located in the city will rise .
Here is the catch if the stores in city reduce the price of the fish then they will not be maintaining high profit margins .
Hence E is the only answer.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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03 Jul 2017, 05:15
arvind910619 wrote:
Lets see what the argument means .
When all the prices from wholesalers to business are same, then the cost store within and outside the city have same profitability .
But a new tax is implemented in city that will reduce the cost of doing business in city and because of that profit margins of the stores located in the city will rise .
Here is the catch if the stores in city reduce the price of the fish then they will not be maintaining high profit margins .
Hence E is the only answer.

I think you make some mistakes here, the stores IN CITY have to reduce the price of the fish to maintain high profit margins.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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01 Nov 2017, 13:48
Can someone explain me why A is incorrect?? If we know that new tax depends on the location of business within the city or outside the city, shouldn't we know where are located the wholesalers to determine how will be stores margins?
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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01 Nov 2017, 15:18
Fedemaravilla wrote:
Can someone explain me why A is incorrect?? If we know that new tax depends on the location of business within the city or outside the city, shouldn't we know where are located the wholesalers to determine how will be stores margins?

E is much better than A.
A depends on many assumptions, and A do not make sure that fish stores outside city won't buy fishes from whosalers in the city. Only E can show a difference between stores in the city and those outside the city. Also, A does not concern with the price, so A may not concern with the profit margin as well.
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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22 Feb 2018, 18:39
Fedemaravilla wrote:
Can someone explain me why A is incorrect?? If we know that new tax depends on the location of business within the city or outside the city, shouldn't we know where are located the wholesalers to determine how will be stores margins?

A is incorrect because the higher number of store within the city actually won't tell us anything, since each store (within or outside the city) will have the same profit margin rate. Consider the following:

1000 store within the city with 40% profit margin vs 100 store outside with 20% profit margin
And
2000 store within the city with 50% profit margin vs 100 store outside with 20% profit margin

You see, the changes in number of store won't affect the profit margin rate at all, so A is not useful to evaluate the argument
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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22 Feb 2018, 22:09
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

(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

this is very hard. argument is simple but logic is hard. why many person and I jump into B and D.

look at D. D is repeating of evidence. fist cost the same is evidence. so, we have to RESIST ATTRACTIVENESS OF EVIDENCE REPEATING.

i choose B and try to find out why B is wrong.
i think when person move stores to the city, person will reduce price and profit margin is lower. but this is wrong. it is possible that person dose not reduce price but close the store. so, b is not right. B require too much assumption.

RESIST CHOICE WHICH REQUIRE TOO MUCH ASSUMPTION.

choice E, directly affect the argument and is correct.
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Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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22 Feb 2018, 23:00
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

(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

I'll try to explain why E is the most useful answer:

First, the argument conclude that because of a new tax policy, profit margin will be higher in seafood store within the city than outside, and keep in mind that we want the most USEFUL answer - the answer give us the most relevant information to evaluate the argument

(A): Option A tell us there are more store within the city rather than outside, this only tell us it's likely that total profit of store within the city will be higher, but it gives us no information about the profit margin

(B): Option B offer us similar information like option A, give us only the indication of number of stores within and outside the city, if the number of store inside the city after relocation is higher than outside the city, it's basically information of option A again, so this definitely cannot be the answer.

(C): Option C tell us price of fish will fall, but since both type of store get fish from the same source, they will be affected similarly, so we can't determine anything using this information

(D): Option D is basically information from the passage, so it's not relevant

(E): Option E tell us that price will be different, combine with the difference in tax policy, now we got 2 elements to work with (difference in selling price and difference in tax), therefore option E will be MOST USEFUL

Hope it helps
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Re: Fish currently costs about the same at seafood stores throughout Eastv [#permalink]

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16 Mar 2018, 09:57
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 --Argument is about profit margin

(B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city --Argument is about profit margin

(C) The wholesale price of fish is likely to fall in the future --Argument is about profit margin

(D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs --we already know this from the argument

(E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores --Correct. If the stores reduce prices to accommodate lower taxes then the profit will be same through out the region; but if, they don't reduce then the profit will increase.
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Re: Fish currently costs about the same at seafood stores throughout Eastv   [#permalink] 16 Mar 2018, 09:57

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