Last visit was: 25 Apr 2024, 10:29 It is currently 25 Apr 2024, 10:29

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
SORT BY:
Date
Tags:
Show Tags
Hide Tags
User avatar
Senior Manager
Senior Manager
Joined: 10 Feb 2006
Posts: 466
Own Kudos [?]: 3904 [213]
Given Kudos: 0
Send PM
Most Helpful Reply
User avatar
Manager
Manager
Joined: 07 Feb 2008
Posts: 196
Own Kudos [?]: 951 [18]
Given Kudos: 1
Send PM
GMAT Club Verbal Expert
Joined: 13 Aug 2009
Status: GMAT/GRE/LSAT tutors
Posts: 6921
Own Kudos [?]: 63668 [13]
Given Kudos: 1774
Location: United States (CO)
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170

GRE 2: Q170 V170
Send PM
General Discussion
User avatar
Intern
Intern
Joined: 09 May 2008
Posts: 48
Own Kudos [?]: 89 [5]
Given Kudos: 0
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
1
Kudos
4
Bookmarks
A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to
avoid an increase in the cost per pack to consumers in Coponia.
- correct (note also 9% increase is on existing taxes)
B. Previous increases in cigarette prices in Coponia have generally been due to
increases in taxes on cigarettes.
- previous increase is due to taxes or not is irrelevant to the argument.
C. Any decrease in per capita sales of cigarettes in Coponia will result mainly from
an increase in the number of people who quit smoking entirely.
- no that's not assumed. it's too strong a statement.
D. At present, the price of a pack of cigarettes in Coponia includes taxes that amount
to less than ten percent of the total selling price.
- even if they do, we don't know what impact a 9% percent increase in taxes would manifest into - i mean whether the impact would lead to a 10 % percentage point increase on selling price per pack or less. can't say.
E. The number of people in Coponia who smoke cigarettes has remained relatively
constant for the past several years.
- irrelevant. whether people have increased or remained relatively constant - the impact on sales is in percentage terms - 4% decrease. so number really isn't the game here.
User avatar
Manager
Manager
Joined: 29 Aug 2005
Posts: 135
Own Kudos [?]: 267 [4]
Given Kudos: 0
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
1
Kudos
3
Bookmarks
alimad wrote:
In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. Coponia is about to raise taxes on cigarettes by 9 cents per pack. The average price of cigarettes in Coponia is and has been for more than a year 90 cents per pack. So the tax hike stands an
excellent chance of reducing per capita sales of cigarettes by four percent.
Which of the following is an assumption on which the argument depends?


A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to
avoid an increase in the cost per pack to consumers in Coponia.
B. Previous increases in cigarette prices in Coponia have generally been due to
increases in taxes on cigarettes.
C. Any decrease in per capita sales of cigarettes in Coponia will result mainly from
an increase in the number of people who quit smoking entirely.
D. At present, the price of a pack of cigarettes in Coponia includes taxes that amount
to less than ten percent of the total selling price.
E. The number of people in Coponia who smoke cigarettes has remained relatively
constant for the past several years.

Please justify your answers. thanks


IMO A is the answer
here is my reasoning for the same

Premise 1
In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent.
Premise 2
Coponia is about to raise taxes on cigarettes by 9 cents per pack.

Conclusion
So (the word indicates conclusion) the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.

we are supposed to find the assumption behind this question

now we are told that each time the Company increases the prices, the per capita sales goes down...and now that again Company is proposing a 9 cent increase here then also the per capita sales will further go down
now let us think for a minute what could stop this from happening
if the COmpany reduces its profit margin that it had always claimed as in the past then the prices increase would be off set by that decrease in the profit margin and the per capita sales will not go down
so this should be the assumption here

and A succinctly

HTH

what is the OA for this
User avatar
Intern
Intern
Joined: 09 Jun 2013
Posts: 37
Own Kudos [?]: 200 [4]
Given Kudos: 3
GMAT 1: 680 Q49 V33
GMAT 2: 690 Q49 V34
GPA: 3.86
WE:Analyst (Advertising and PR)
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
2
Kudos
2
Bookmarks
One important tool to use in assumption questions is the negation technique. If you negate the correct answer choice, it should weaken the argument. It's useful tool when you stuck between two answer choices. So let's try negating choice (D). "At the present, the price of a pack of cigarettes in Coponia DOES NOT include taxes that amount to less than ten percent of the total selling price" If this is the case, the current taxes and the additional 9 cents would increase the total price. Thus, this further strengthens the argument instead of WEAKENING it. Hope this helps ^^
User avatar
Senior Manager
Senior Manager
Joined: 05 Nov 2012
Posts: 343
Own Kudos [?]: 4586 [3]
Given Kudos: 606
Concentration: Technology, Other
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
3
Kudos
every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. Coponia is about to raise taxes on cigarettes

Conclusion:
Tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.
A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.
E. The number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years.

A vs E:
With option E there can be multiple combinations, which would give different results. e.g.
# of smokers may go high or low Or it may be that each smoker by more packets etc. Whereas A is very straight in answering the assumption after negation.
Also option E doesnt mention about the tax hike. Infact it introduces another factor that can impact the per capita consumption and we are not not concerned about that.
User avatar
Intern
Intern
Joined: 23 Nov 2010
Posts: 42
Own Kudos [?]: 280 [8]
Given Kudos: 85
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
2
Kudos
5
Bookmarks
Using the MGMAT answer from a forum here, for everyone's benefit.

Question Type: Assumption.
Conclusion: The tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.
Tactic: Negation

alimad wrote:
In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. Coponia is about to raise taxes on cigarettes by 9 cents per pack. The average price of cigarettes in Coponia is and has been for more than a year 90 cents per pack. So the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.

Which of the following is an assumption on which the argument depends?

A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.

Negate: Tobacco companies are LIKELY to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.

If tobacco companies will reduce their profit by not increasing the price of cigarettes, then smokers will not reduce their smoking and per capita sales of cigarettes will NOT fall by four percent. Conclusion is falls apart, so this is an assumption.


B. Previous increases in cigarette prices in Coponia have generally been due to increases in taxes on cigarettes.

Previous increases are irrelevant.
Negate: Previous sales have not been due to increase in taxes.
This doesnt imply that the conclusion will no longer be valid.


C. Any decrease in per capita sales of cigarettes in Coponia will result mainly from an increase in the number of people who quit smoking entirely.

Not addressing the conclusion
Negate: Decrease in per capita sales of cigarettes is not due to people quitting smoking entirely.
This also doesnt imply that the conclusion will no longer be valid.


D. At present, the price of a pack of cigarettes in Coponia includes taxes that amount to less than ten percent of the total selling price.



Negate: Taxes is greater than 10% of total selling price
Even if the taxes > 10% before the tax hike, it doesnt imply that the conclusion will no longer be true. The conclusion is clear in that a 10 perc point increase will lead to reduced per capita sales. It doesnt mention specific limits on the proportion of taxes v/s total selling price.


E. The number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years.

Negate: The number of people in Coponia who smoke cigarettes has NOT remained relatively constant for the past several years.

Per capita sales of cigarettes may be different for each year.
Say last year per capita sales of cigarettes was 10 and this year per capita sales of cigarettes is 12. If this year cigarette prices is increased by ten-percentage-point then per capita sales of cigarettes will still fall by four percent. Conclusion is still intact, so rule out E.


User avatar
Manager
Manager
Joined: 03 May 2015
Posts: 129
Own Kudos [?]: 232 [2]
Given Kudos: 23
Location: South Africa
Concentration: International Business, Organizational Behavior
GPA: 3.49
WE:Web Development (Insurance)
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
2
Kudos
alimad wrote:
In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. Coponia is about to raise taxes on cigarettes by 9 cents per pack. The average price of cigarettes in Coponia is and has been for more than a year 90 cents per pack. So the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.

Which of the following is an assumption on which the argument depends?

A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.
B. Previous increases in cigarette prices in Coponia have generally been due to increases in taxes on cigarettes.
C. Any decrease in per capita sales of cigarettes in Coponia will result mainly from an increase in the number of people who quit smoking entirely.
D. At present, the price of a pack of cigarettes in Coponia includes taxes that amount to less than ten percent of the total selling price.
E. The number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years.

Please justify your answers. thanks



Premise : 10% increase in selling price reduces smoking by 4%. The 10% hike in taxes will reduce smoking by 4%.

Assumption: There is a wide gap between selling price and increasing taxes. The argument has facts based on selling price but it depends on tax hike.

So the perfect assumption would be " Increased tax hike = increased selling price"

A says that the companies won't cut back on profit for negating the tax hike. So ja, it does mean that sp will increase by 10% ( hold on)

For other confusing option :

he number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years.

This is not an assumption, this is breaking the argument. Assumption holds the argument together.

According to E: past several years smokers constant. So changing the selling price won't affect it anyway.

Please let me know if you have doubts in other options.
Intern
Intern
Joined: 23 Sep 2014
Posts: 21
Own Kudos [?]: 10 [0]
Given Kudos: 117
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
GMATNinja, GMATNinjaTwo, nightblade354

Hi,

Could you help me understand if I understand the argument correctly? As I understand, for an argument in GMAT, there should be no other possible explanation for the conclusion other than the underlying assumption (read this from PowerScore book). So for this question, can I understand that the author considered the increase in selling price is the only cause of the reduction in sale/capita?

Let's say if option C is changed to: "Any decrease in per capita sales of cigarettes in Coponia will NOT result mainly from an increase in the number of people who quit smoking entirely." The negation of this will present a different explanation for the reduction in the per capita sales of cigarettes, and thus will break the conclusion that the increase in selling price will result in lower per capital sales of cigarettes.

I'm not sure if the condition of increases in selling price is a NECESSARY or a SUFFICIENT condition for the conclusion here? If it is just sufficient, then my original understanding about the author's argument is incorrect.

Thank you.
Senior Manager
Senior Manager
Joined: 05 Feb 2018
Posts: 312
Own Kudos [?]: 794 [1]
Given Kudos: 325
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
1
Kudos
alimad wrote:
In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. Coponia is about to raise taxes on cigarettes by 9 cents per pack. The average price of cigarettes in Coponia is and has been for more than a year 90 cents per pack. So the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.

Which of the following is an assumption on which the argument depends?


Price up 10% --> Sales down 4%
Tax +9 cents, Avg is 90, so 1/10th
Therefore, Sales will decrease 4%

A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.

-- If the companies reduce initial price, then even post-tax the price could stay the same, so there would be no decrease in sales
-- Can be made obvious using negation... "companies are LIKELY to reduce their profit to avoid an increase..." directly harms conclusion.

All other choices are out of scope/irrelevant.
Intern
Intern
Joined: 24 Jul 2020
Posts: 18
Own Kudos [?]: 8 [0]
Given Kudos: 33
Location: India
Concentration: Marketing, Finance
GPA: 3.88
Send PM
In the past, every ten-percentage-point increase in cigarette prices [#permalink]
________________________________________
Why not B?
Target Test Prep Representative
Joined: 24 Nov 2014
Status:Chief Curriculum and Content Architect
Affiliations: Target Test Prep
Posts: 3480
Own Kudos [?]: 5137 [2]
Given Kudos: 1431
GMAT 1: 800 Q51 V51
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
2
Kudos
Expert Reply
HardikSogani wrote:
Why not B?

Here's (B).

    B. Previous increases in cigarette prices in Coponia have generally been due to increases in taxes on cigarettes.

The premise is simply that, when prices have increased by 10 percent, sales have decreased by 4 percent.

How that price increase has occurred doesn't really matter. We are concerned with the effect on sales of a price increase, and that effect should be the same regardless of how the price increase occurred.
Intern
Intern
Joined: 12 Apr 2020
Posts: 23
Own Kudos [?]: 1 [0]
Given Kudos: 151
Location: United States (AL)
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
I understand why A is the correct choice but unable to wrap my head around why E is incorrect. The conclusion states that the 4% hike in taxes will result in a consequent decrease in per capita sales of cigarettes. The way I am visualizing this number is as total sales of cigarettes/ total population of Coponia. If the sales remain the same but the total population increases then the per capita sales will decrease right? And we need the the total pop to be constant for the tax hike to result in a decrease in per capita sales.

GMATNinja MartyTargetTestPrep could you guys help resolve? Thanks in advance.
Target Test Prep Representative
Joined: 24 Nov 2014
Status:Chief Curriculum and Content Architect
Affiliations: Target Test Prep
Posts: 3480
Own Kudos [?]: 5137 [0]
Given Kudos: 1431
GMAT 1: 800 Q51 V51
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
Expert Reply
ag1991 wrote:
I understand why A is the correct choice but unable to wrap my head around why E is incorrect. The conclusion states that the 4% hike in taxes will result in a consequent decrease in per capita sales of cigarettes. The way I am visualizing this number is as total sales of cigarettes/ total population of Coponia. If the sales remain the same but the total population increases then the per capita sales will decrease right? And we need the the total pop to be constant for the tax hike to result in a decrease in per capita sales.

1. Where does the passage say anything about an increase, or decrease, in the population of Coponia?

2. Regardless of whether the population increases or decreases, choice (E) does not say that, in the future, the number of people smoking will remain constant, only that in the past the number has been relatively constant.

3. Even if the population were to increase without an increase in the number of people who smoke, the tax hike itself could have the effect of decreasing per capita sales of cigarettes, regardless of what else has occurred. Notice that the passage does not predict anything other than that the tax hike will reduce per capita sales. In other words, if per capita sales decrease before the tax hike occurs, then what the passage says implies that per capita sales will decrease even more because of the tax hike.
Intern
Intern
Joined: 20 Nov 2020
Posts: 5
Own Kudos [?]: 0 [0]
Given Kudos: 13
GMAT 1: 720 Q49 V40
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
Please some one explain why B isn't correct.

Would it have been correct without the word "previous"???

My reasoning is that the conclusion would possible not be true if there were other factors influencing the sales of the cigs.
Director
Director
Joined: 05 Jul 2020
Posts: 590
Own Kudos [?]: 301 [1]
Given Kudos: 154
GMAT 1: 720 Q49 V38
WE:Accounting (Accounting)
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
1
Kudos
Pietrus95 wrote:
Please some one explain why B isn't correct.

Would it have been correct without the word "previous"???

My reasoning is that the conclusion would possible not be true if there were other factors influencing the sales of the cigs.


Pietrus95, B has no baring on the argument. Whatever happens generally or has happened generally in the past is not our concern. The govt is about to increase the tax, which is one component of the total price. We need something to cement the total price except taxes. A does that perfectly.

Also, I've noticed that it might not be the best approach to think about an option after removing certain words. Each word in a GMAT question plays a huge role and by removing words and then thinking about the option may not be helpful as it will certainly hamper the quality of the option. Of course, I am no expert so take this response with a pinch of salt! :)
Director
Director
Joined: 05 Jul 2020
Posts: 590
Own Kudos [?]: 301 [1]
Given Kudos: 154
GMAT 1: 720 Q49 V38
WE:Accounting (Accounting)
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
1
Kudos
Bunuel, this is a GMATprep question.
Math Expert
Joined: 02 Sep 2009
Posts: 92914
Own Kudos [?]: 618969 [0]
Given Kudos: 81595
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
Expert Reply
Brian123 wrote:
Bunuel, this is a GMATprep question.


_____________________
Added the tag. Thank you!
Intern
Intern
Joined: 09 Oct 2019
Posts: 43
Own Kudos [?]: 4 [0]
Given Kudos: 65
Send PM
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
HI Bunuel GMATNinja

A question wrt to the terminology used in the question and it got me pretty confused.

It mentions "10 percentage point increase" - which means the difference b/w the two percentages should be 10%.
It should not be confused with a 10% increase, IMO.
But then again, the passage mentioned no other related percentage from which we can take the difference.

Could you please clarify what to consider in these cases?

Thanks!
GMAT Club Bot
Re: In the past, every ten-percentage-point increase in cigarette prices [#permalink]
 1   2   
Moderators:
GMAT Club Verbal Expert
6921 posts
GMAT Club Verbal Expert
238 posts
CR Forum Moderator
832 posts

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