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# For many years, alcohol producers followed a self imposed

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For many years, alcohol producers followed a self imposed  [#permalink]

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Updated on: 04 Jul 2014, 06:00
8
00:00

Difficulty:

45% (medium)

Question Stats:

67% (01:46) correct 33% (01:44) wrong based on 550 sessions

### HideShow timer Statistics

For many years, alcohol producers followed a self imposed ban on advertising on television. Eventually, some producers broke the ban and began advertising their products on television. The producers who advertised on television generally charged less for their products, and so if all the producers began advertising in this fashion, overall costs to consumers would be lower than if they did not advertise.

Which of the following must be true if the statements above are true?

(A) More consumers will drink alcohol if there are more alcohol advertisements on TV.

(B) Alcohol producers who currently advertise their products on television will raise their prices if other producers decide to advertise on TV.

(C) When the self-imposed ban was first broken, those alcohol producers who chose not to advertise on television generally charged more for their products than alcohol producers who joined in breaking the ban.

(D) If there had not been a self-imposed ban on TV advertising,all alcohol producers would have advertised on TV.

(E) If additional alcohol producers decide to advertise and lower their prices,the alcohol producers who do not advertise on TV will lower their prices.

Source : PowerScore

Originally posted by maggie27 on 03 Jul 2014, 06:00.
Last edited by maggie27 on 04 Jul 2014, 06:00, edited 1 time in total.
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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03 Jul 2014, 06:35
2
An inference should be a restatement of the premise. Lets check the answer choices to do the POE

(A) More consumers will drink alcohol if there are more alcohol advertisements on TV- This is out of scope as it gives us new information and this doesn't say about the reduce in the cost for the customer, rather it says only many people will drink alcohol.

(B) Alcohol producers who currently advertise their products on television will raise their prices if other producers decide to advertise on TV- The last part of the argument says that, the overall cost will reduce for the customers- Hence this is not what we inferred from the passage and it is an assumption that they may increase the price- Not necessarily.

(C) When the self-imposed ban was first broken,those alcohol producers who chose not to advertise on television generally charged more for their products than alcohol producers who joined in breaking the ban- This looks nothing but a reword of the argument- It says that the alcohol producers who did not advertise charged more than the alcohol producers who advertise.

(D) If there had not been a self-imposed ban on TV advertising,all alcohol producers would have advertised on TV- Not likely, this might be true- BUT not MUST BE TRUE- We may even have some alcohol producers who tend not to advertise, even if there is no ban.

(E) If additional alcohol producers decide to advertise and lower their prices,the alcohol producers who do not advertise on TV will lower their prices- Same as D. Also this is an assumption that if most of the alcohol produces decide to advertise then all of them will lower the price- Not necessarily.

So I go with C.
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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03 Jul 2014, 06:29
maggie27 wrote:
For many years,alcohol producers followed a self imposed ban on advertising on television.Eventually,some producers broke the ban and began advertising their products on television.The producers who advertised on television generally charged less for their products ,and so if all the producers began advertising in this fashion,overall costs to consumers would be lower than if they did not advertise.

Which of the following must be true if the statements above are true?

(A) More consumers will drink alcohol if there are more alcohol advertisements on TV.
(B) Alcohol producers who currently advertise their products on television will raise their prices if other producers decide to advertise on TV.
(C) When the self-imposed ban was first broken,those alcohol producers who chose not to advertise on television generally charged more for their products than alcohol producers who joined in breaking the ban.
(D) If there had not been a self-imposed ban on TV advertising,all alcohol producers would have advertised on TV.
(E) If additional alcohol producers decide to advertise and lower their prices,the alcohol producers who do not advertise on TV will lower their prices.

Need help.
OA to follow after some discussions.

B for me. If other producers also start advertising on TV, producers who are currently advertising will lose the advantage of TV advertisements. All are at par now and additionally bearing the cost of advertisements which they did not incur earlier. so all producers will raise their price to absorb the cost of advertisements and maintain their profitability atleast at earlier levels.
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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03 Jul 2014, 06:33
IMO C As it is indicated in the premise that the alcohol producers who advertise on television were selling there product for less , it means that when the Self imposed ban was broken( By producers who were selling for less) other producers who did not advertise on TV must be costlier

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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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03 Jul 2014, 06:36
It seems to me that C) is the best choice.

I believe B) is incorrect because we donot have any clue to understand from the FactSet, that the trend mentioned in B) will take place.
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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03 Jul 2014, 11:38
IMO E.

"if all the producers began advertising in this fashion,overall costs to consumers would be lower than if they did not advertise."

(E) If additional alcohol producers decide to advertise and lower their prices,the alcohol producers who do not advertise on TV will lower their prices.

If this trend is followed further, overall cost will decline, and E is the only statement which follows such tone.
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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04 Jul 2014, 06:07
OA is C.

I have a doubt regarding the statement that we make about these questions that "No new info should be entertained". And option C felt like absolute new info and we even may consider it out of scope that is not something which is mentioned in the argument. What happened when the ban was first broken,how would we know?
How to understand that under what scenarios new info can be considered?
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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04 Jul 2014, 06:34
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maggie27 wrote:
OA is C.

I have a doubt regarding the statement that we make about these questions that "No new info should be entertained". And option C felt like absolute new info and we even may consider it out of scope that is not something which is mentioned in the argument. What happened when the ban was first broken,how would we know?
How to understand that under what scenarios new info can be considered?

Hi,

There should be no new info in the inference questions.

An inference is basically a logical inference from combination of one or more premises. As i posted earlier, it is normally a restatement of the premise.

In short, the must be true/ inference questions asks to select the answer which is proven by the information in the argument. When you compare C and the information in the stimulus, you can come to a conclusion that C is just a paraphrase of the argument.

For your doubt: What happened when the ban was first broken,how would we know?

the stimulus states that, some producers eventually broke the ban- It means some producers are the first to break the ban- isn't these two related?

I feel they are.

Hope this helps.

1. E-GMAT- Inference Vs Assumptions.

2. Magoosh- Find the Conclusion or Inference

3. Veritas Prep- Effectively tackling Must be true questions.
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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09 Nov 2015, 13:53
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maggie27 wrote:
OA is C.

I have a doubt regarding the statement that we make about these questions that "No new info should be entertained". And option C felt like absolute new info and we even may consider it out of scope that is not something which is mentioned in the argument. What happened when the ban was first broken,how would we know?
How to understand that under what scenarios new info can be considered?

I agree with maggie27 The question stimuli says that there was a ban but not a collusion. How do we know that all producers charged the same price? Moreover, the argument says that those who advertised charged less...Less than what? Than before or less than those who didn't advertise? So i think that C is not a correct answer
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Re: For many years, alcohol producers followed a self imposed  [#permalink]

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12 Nov 2018, 22:24
maggie27 wrote:
For many years, alcohol producers followed a self imposed ban on advertising on television. Eventually, some producers broke the ban and began advertising their products on television. The producers who advertised on television generally charged less for their products, and so if all the producers began advertising in this fashion, overall costs to consumers would be lower than if they did not advertise.

Which of the following must be true if the statements above are true?

(A) More consumers will drink alcohol if there are more alcohol advertisements on TV.

(B) Alcohol producers who currently advertise their products on television will raise their prices if other producers decide to advertise on TV.

(C) When the self-imposed ban was first broken, those alcohol producers who chose not to advertise on television generally charged more for their products than alcohol producers who joined in breaking the ban.

(D) If there had not been a self-imposed ban on TV advertising,all alcohol producers would have advertised on TV.

(E) If additional alcohol producers decide to advertise and lower their prices,the alcohol producers who do not advertise on TV will lower their prices.

Source : PowerScore

Difficulty Level: 650

Official Explanation

The structure of the argument is as follows:

Premise: For many years, alcohol producers followed a self-imposed industry ban on advertising on television.
Premise: Eventually, some producers broke the ban and began advertising their products on television.
Premise: The producers who advertised on television generally charged less for their products.
Conclusion: so if all producers began advertising in this fashion, overall costs to consumers would be lower than if they did not advertise.

This stimulus is relatively easy to understand: a comparison is made between alcohol producers who began to advertise on television and alcohol producers who initially did not. We are told that the producers that first began to advertise on television generally charged less for their products and that, if all advertisers began to advertise this way (with lower prices), then the consumers’ overall costs would be lower.

Answer choice (A): The information in the stimulus is about cost, not consumption. We cannot assume that increased advertising will automatically increase consumer consumption.

Answer choice (B): There is no way to know how alcohol producers who advertise on television will behave if other producers also begin to advertise. All we know is that if other producers begin to advertise similarly (i.e. charge less for their product), then overall consumer costs will decrease.

Answer choice (C): This is the correct answer. The stimulus tells us that when the first producers broke the ban and began to advertise, they generally charged less than non-advertising producers. So it must be true that those producers who did not initially advertise generally charged more for their products than the advertising producers.

Answer choice (D): The stimulus does not provide any information that would allow us to infer how alcohol producers might have behaved without the self-imposed advertising ban.

Answer choice (E): All that we can infer from the information provided is that if more producers begin to advertise and subsequently lower their prices, the overall cost to consumers will be lowered. We cannot know what effect that would have on the price of alcohol from producers who still choose not to advertise.

Hope it Help
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Re: For many years, alcohol producers followed a self imposed &nbs [#permalink] 12 Nov 2018, 22:24
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