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In 1984 Exco, which sells it s products only through mail-order catalo

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In 1984 Exco, which sells it s products only through mail-order catalo  [#permalink]

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New post 29 Aug 2018, 04:13
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In 1984 Exco, which sells it s products only through mail-order catalogs, began distributing its catalog to people who had never purchased Exco’s products, while it continued to distribute the catalog to previous customers. Total dollar sales increased in 1984, but Exco’s profits that year were smaller than in 1983.

Which of the following, if true, contributes most to an explanation of Exco’s smaller profits in 1984, as compared to 1983?


(A) There was a two percent increase in 1984 in the sales tax that consumers had to pay on all purchases from the catalog.

(B) A greater number of catalogs were sent to previous customers than to people who never purchased products from Exco.

(C) In 1984 Exco’s product-manufacturing costs increased by a smaller amount than the products’ selling prices increased.

(D) Customers who never previously purchased products from Exco purchased, on the average, fewer products in 1984 than did previous customers.

(E) The increase between 1983 and 1984 in the cost of mailing the catalogs was greater than the increase in sales from 1983 to 1984.

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Re: In 1984 Exco, which sells it s products only through mail-order catalo  [#permalink]

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New post 20 Sep 2018, 02:28
Bunuel wrote:
In 1984 Exco, which sells it s products only through mail-order catalogs, began distributing its catalog to people who had never purchased Exco’s products, while it continued to distribute the catalog to previous customers. Total dollar sales increased in 1984, but Exco’s profits that year were smaller than in 1983.

Which of the following, if true, contributes most to an explanation of Exco’s smaller profits in 1984, as compared to 1983?



(A) There was a two percent increase in 1984 in the sales tax that consumers had to pay on all purchases from the catalog.
consumers had to pay not the seller.even if the consumer is discouraged from buying ,the catalogue were sent to more number of people than before...that means more people should buy than before, but this option can be selected if no other option available.
(B) A greater number of catalogs were sent to previous customers than to people who never purchased products from Exco.
does not explain why the drop in sales.
(C) In 1984 Exco’s product-manufacturing costs increased by a smaller amount than the products’ selling prices increased.
this option explains the point but manu. cost increase is little out of scope,we can pick this option if no better option is available.
(D) Customers who never previously purchased products from Exco purchased, on the average, fewer products in 1984 than did previous customers.this should actually increase the sales.becuase new customers are buying.

(E) The increase between 1983 and 1984 in the cost of mailing the catalogs was greater than the increase in sales from 1983 to 1984.
Best option which explains the decrease in sales in a coherent manner that is the options reasoning stays completey inside the scope of the provided argument.
thus the best option
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Re: In 1984 Exco, which sells it s products only through mail-order catalo &nbs [#permalink] 20 Sep 2018, 02:28
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In 1984 Exco, which sells it s products only through mail-order catalo

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