Fish currently costs about the same at seafood stores throughout Eastv

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 ??

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.

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.

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

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.

Why is it not (D)? Will these type of questions appear in GMAT?

Hi Anant

Let us analyze the argument presented in the stimulus:

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

Why:

1) Seafood stores buy fish from the same wholesalers and at the same prices.
2) Other business expenses have also been about the same.
3) New tax breaks will substantially lower the cost of doing business within the city.

Therefore, tax expense for doing business within the city will reduce, thereby improving profits and profit margins.

To evaluate the argument, it would help to get any information about either revenue (sales) of seafood stores or costs (since the conclusion is about the profit margins).

Option (D) states: Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs.

This is a backward looking statement whereas the conclusion is about profit margins going forward. (D) therefore does not provide us with any information that could help in evaluating the conclusion.

I am unsure about what you mean by "these type of questions". This is a typical evaluate the argument question within the GMAT.

Hope this helps.

The issue with D is that it talks about the past. The time frame in concern for the evaluation here is the future, after the tax break is instituted in the city. It is particularly important in CR questions to be sure about the period which the passage and the option talk about. It is an often used trap!

Arathy

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Context:
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.

Premises:
New tax breaks will substantially lower the cost of doing business within the city.

Conclusion:
Profit margins will be higher at seafood stores within the city than at suburban seafood stores.

We need to evaluate whether the profit margins will be higher at seafood stores within the city. We know that as of now all costs were similar for city stores as well as suburban stores. But the new tax breaks will lower the cost of doing business in the city. So, we expect the cost to be lower in the city and hence, the profit margin to be higher in the city. What do we need to know to evaluate whether it will be so?

(A) More fish wholesalers are located within the city than in the surrounding suburbs

This doesn’t matter in either case. The number of businesses in city and number in suburbs are whatever they are.

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

Note “nearer” to the city, not “in” the city. The tax breaks are going to be applicable to businesses in the city. Hence if suburban stores move nearer to the city, it won’t impact anything one way or the other. The number of stores in the suburbs and number in the city will not change.

(C) The wholesale price of fish is likely to fall in the future

All stores get their fish from wholesalers. If the wholesale price falls, it will fall for everyone equally. Hence, cost of obtaining fish will still be the same for everyone.

(D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs

What happened in the past does not impact what may happen in the future.

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

Yes, profit margin is dependent on two things – Cost and Selling Price.
If cost will decrease for city stores, we need to know whether they will decrease their selling price too.
If we answer

“Yes” – City stores will set lower selling price. Then their profit margins may not be higher than suburb profit margins.

“No” – City stores will not set lower selling price. Then their profit margins will be higher than suburb profit margins.

The two answers affect the conclusion differently. Hence, this is the correct option.

Answer (E)

Discussion on Useful to Evaluate Questions: https://youtu.be/1JtHjH1lWZc