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

It is currently 18 Jan 2019, 14:17

Close

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
Your Progress

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

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel
Events & Promotions in January
PrevNext
SuMoTuWeThFrSa
303112345
6789101112
13141516171819
20212223242526
272829303112
Open Detailed Calendar
  • Free GMAT Strategy Webinar

     January 19, 2019

     January 19, 2019

     07:00 AM PST

     09:00 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.
  • FREE Quant Workshop by e-GMAT!

     January 20, 2019

     January 20, 2019

     07:00 AM PST

     07:00 AM PST

    Get personalized insights on how to achieve your Target Quant Score.

Fish currently costs about the same at seafood stores throughout Eastv

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

 
VP
VP
User avatar
Joined: 03 Apr 2007
Posts: 1152
Reviews Badge
Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post Updated on: 17 Dec 2018, 04:22
13
28
00:00
A
B
C
D
E

Difficulty:

  45% (medium)

Question Stats:

67% (01:22) correct 33% (01:32) wrong based on 2129 sessions

HideShow timer Statistics

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

Originally posted by goalsnr on 27 May 2008, 18:09.
Last edited by Bunuel on 17 Dec 2018, 04:22, edited 2 times in total.
Edited the question.
Most Helpful Community Reply
Retired Moderator
avatar
Joined: 20 Dec 2010
Posts: 1809
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 10 Jun 2011, 07:13
5
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.
_________________

~fluke

GMAT Club Premium Membership - big benefits and savings

General Discussion
Intern
Intern
avatar
Joined: 10 Apr 2006
Posts: 4
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 27 May 2008, 18:51
3
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.
Director
Director
avatar
Joined: 23 Sep 2007
Posts: 742
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 27 May 2008, 22:23
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
VP
User avatar
Joined: 03 Apr 2007
Posts: 1152
Reviews Badge
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 28 May 2008, 19:15
1
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.
Director
Director
avatar
Joined: 23 Sep 2007
Posts: 742
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 28 May 2008, 20:04
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
CEO
User avatar
Joined: 17 May 2007
Posts: 2838
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 28 May 2008, 21:03
1
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.
Intern
Intern
avatar
Joined: 21 May 2010
Posts: 1
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 08 Jun 2010, 06:57
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'.
Senior Manager
Senior Manager
User avatar
Affiliations: ACA, CPA
Joined: 26 Apr 2009
Posts: 384
Location: Vagabond
Schools: BC
WE 1: Big4, Audit
WE 2: Banking
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 10 Jun 2010, 00:26
1
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'.

_________________

If you have made mistakes, there is always another chance for you. You may have a fresh start any moment you choose, for this thing we call "failure" is not the falling down, but the staying down.

Intern
Intern
avatar
Joined: 09 Feb 2010
Posts: 44
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 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 ??
Intern
Intern
User avatar
Joined: 10 Oct 2011
Posts: 45
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

New post 03 Jul 2012, 05:40
1
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
Manager
User avatar
Joined: 28 Jul 2011
Posts: 181
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 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 :)
Manager
Manager
avatar
Joined: 19 Oct 2010
Posts: 173
Location: India
GMAT 1: 560 Q36 V31
GPA: 3
GMAT ToolKit User
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 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

SVP
SVP
User avatar
G
Joined: 14 Apr 2009
Posts: 2281
Location: New York, NY
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 24 Jun 2013, 10:46
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.
Intern
Intern
avatar
Joined: 30 Jun 2014
Posts: 16
Concentration: Strategy, General Management
GMAT 1: 640 Q50 V26
GMAT ToolKit User
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 30 Nov 2014, 20:01
3
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
Manager
Manager
User avatar
B
Joined: 28 Jan 2018
Posts: 52
Location: Netherlands
Concentration: Finance
GMAT 1: 710 Q50 V36
GPA: 3
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 22 Feb 2018, 22:00
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
BSchool Forum Moderator
User avatar
V
Joined: 28 Mar 2017
Posts: 1219
Location: India
GMAT 1: 730 Q49 V41
GPA: 4
Re: Fish currently costs about the same at seafood stores throughout Eastv  [#permalink]

Show Tags

New post 16 Mar 2018, 08:57
1
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.
_________________

Kudos if my post helps!

Long And A Fruitful Journey - V21 to V41; If I can, So Can You!!
Preparing for RC my way
RC Summary Activity - New Project to imporve RC Skills
Bloomberg's US Bschool Ranking

My study resources:
1. Useful Formulae, Concepts and Tricks-Quant | 2. e-GMAT's ALL SC Compilation | 3. LSAT RC compilation | 4. Actual LSAT CR collection by Broal | 5. QOTD RC (Carcass) | 6. Challange OG RC | 7. GMAT Prep Challenge RC

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 3574
Premium Member
Re: Fish currently costs about the same at seafood stores  [#permalink]

Show Tags

New post 17 Dec 2018, 04:24
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________

-
April 2018: New Forum dedicated to Verbal Strategies, Guides, and Resources

GMAT Club Bot
Re: Fish currently costs about the same at seafood stores &nbs [#permalink] 17 Dec 2018, 04:24
Display posts from previous: Sort by

Fish currently costs about the same at seafood stores throughout Eastv

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


Copyright

GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.