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In Nation X, the average price of a new automobile is 15,000 to 20,000

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Bunuel
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In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   26 Jul 2018, 04:11
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In Nation X, the average price of a new automobile is 15,000 to 20,000 US dollars, and the average automobile loses approximately ten percent of its market resale value each year.Therefore, if a two-year-old automobile is resold for only 10,000 US dollars, its loss in market resale value has been greater than average for Nation X.

Which of the following indicates a flaw in the reasoning above?


A. Market resale value is only one measure of an automobile’s value.

B. Some two-year-old automobiles in Nation X have market resale values in excess of 20,000 US dollars.

C. It is possible for a new automobile in Nation X to cost 30,000 US dollars.

D. A loss in market resale value beyond what is ordinarily expected does not necessarily indicate poor design.

E. Not all new automobiles are sold for a price within the average range
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Shobhit7
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   26 Jul 2018, 04:45
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IMO, Ans is E.

Conclusion: If an automobile is sold after 2 years for USD 10k, then it's yearly depreciation is more than 10%.

This statement is true if CP of vehicle is within the average range. For example, if CP of vehicle is 15k them @10% annual depreciation, it's SP after 2 years should be USD 12150. (More than actual SP of USD 10k).

Flaw: There could be some automobiles that were purchased below the average CP range of 15k to 20k.

Hence, Ans E

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Sajid0408
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   26 Jul 2018, 04:24
Price Can Depend on Conditions of the car so : A
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   26 Jul 2018, 04:32
E seems to be correct as the data given is an approx data. The actual price of new vehicle can be lower than the average mentioned.

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In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   Updated on: 26 Jul 2018, 17:00
IMO-E....As per this options if the purchase price of a car is less, then loss is not greater.

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Originally posted by gsingh0711 on 26 Jul 2018, 04:38.
Last edited by gsingh0711 on 26 Jul 2018, 17:00, edited 2 times in total.
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   26 Jul 2018, 05:28
Bunuel wrote:
In Nation X, the average price of a new automobile is 15,000 to 20,000 US dollars, and the average automobile loses approximately ten percent of its market resale value each year.Therefore, if a two-year-old automobile is resold for only 10,000 US dollars, its loss in market resale value has been greater than average for Nation X.


+1 for E.

Pre-thinking :
If a two-year-old car is resold for only 10,000 $, then the selling will incur greater than average depreciation.
But what if the original price of the car sold was not within the average range, below average to be precise ?

E. Not all new automobiles are sold for a price within the average range --> Correct, matches our pre-thinking, hence a flaw

Hence, E.
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   30 Jul 2018, 04:04
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Bunuel wrote:
In Nation X, the average price of a new automobile is 15,000 to 20,000 US dollars, and the average automobile loses approximately ten percent of its market resale value each year.Therefore, if a two-year-old automobile is resold for only 10,000 US dollars, its loss in market resale value has been greater than average for Nation X.

Which of the following indicates a flaw in the reasoning above?


A. Market resale value is only one measure of an automobile’s value.

B. Some two-year-old automobiles in Nation X have market resale values in excess of 20,000 US dollars.

C. It is possible for a new automobile in Nation X to cost 30,000 US dollars.

D. A loss in market resale value beyond what is ordinarily expected does not necessarily indicate poor design.

E. Not all new automobiles are sold for a price within the average range


KAPLAN OFFICIAL SOLUTION:



Correct Choice: (E)

The argument concludes that if a two-year-old car is resold for only 10,000 USD, it has experienced greater than average depreciation. But this assumes that its original price was within the “average” range defined in the evidence. It is conceivable that its original price was well below average; if so, then even with average depreciation it could be resold for only 10,000 US dollars after two years. So choice (E) is the best answer.

Choice (A) is a true statement, but irrelevant to the argument: the only measure we are concerned with is resale value.

Choices (B) and (C) describe specific cases of cars that are outside the average price ranges, but they do not point to general flaws in the argument.

Choice (D) brings up the issue of poor design, which is totally outside the scope of the stimulus.
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   09 Aug 2018, 19:10
Bunuel wrote:
In Nation X, the average price of a new automobile is 15,000 to 20,000 US dollars, and the average automobile loses approximately ten percent of its market resale value each year.Therefore, if a two-year-old automobile is resold for only 10,000 US dollars, its loss in market resale value has been greater than average for Nation X.

Which of the following indicates a flaw in the reasoning above?


A. Market resale value is only one measure of an automobile’s value.

B. Some two-year-old automobiles in Nation X have market resale values in excess of 20,000 US dollars.

C. It is possible for a new automobile in Nation X to cost 30,000 US dollars.

D. A loss in market resale value beyond what is ordinarily expected does not necessarily indicate poor design.

E. Not all new automobiles are sold for a price within the average range


Here we don't know the initial cost of the automobile. So, we can't tell whether there is a significant loss in comparison to that in Nation X.
Choice E clearly points out the flaw.
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   05 Nov 2021, 07:08
can someone please help me understand the meaning of this sentence? " its loss in market resale value has been greater than average for Nation X."
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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink] New post   28 Jun 2023, 20:34
Hello from the GMAT Club VerbalBot!

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Re: In Nation X, the average price of a new automobile is 15,000 to 20,000 [#permalink]
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