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In the past year, there has been a large drop in the number

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Director
Joined: 07 Nov 2004
Posts: 683

Kudos [?]: 165 [0], given: 0

In the past year, there has been a large drop in the number [#permalink]

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18 Nov 2004, 15:20
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In the past year, there has been a large drop in the number of new cars sold, due to harsh economic conditions in the marketplace and high taxes. At the same time, the avg price paid for a new car has risen dramatically.

Which of the following, if true best explains the increase in the avg price of a new car?

A) The price of the used car has climbed steadily in the past 10 yrs.
B) There will be a tax reduction later in the year which is expected to aid moderate and low income families.
C) The market for expensive cars has been unaffected by the current economic conditions.
D) Economic conditions are supposed to get significantly worse before the end of the year.
E) Low demand for trucks and vans has lead to lower production in the factories.

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Manager
Joined: 21 Jul 2004
Posts: 120

Kudos [?]: 2 [0], given: 0

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18 Nov 2004, 18:12
I would pick C.

Because the market for expensive cars is not affected by economy, this explains why the avg price has gone up.

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Director
Joined: 07 Nov 2004
Posts: 683

Kudos [?]: 165 [0], given: 0

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18 Nov 2004, 20:29
Doggita you are right. OA is C

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Senior Manager
Joined: 19 Oct 2004
Posts: 315

Kudos [?]: 113 [0], given: 0

Location: Missouri, USA

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19 Nov 2004, 11:17
I think this one's from OG. Well i pick C. the thing is, since the expensive cars can still be bought, there should be a rise in other type of relatively inexpensive cars to compensate for teh bad economy. This is only possible if the average price rises.
D is incorrect as it simply states the information already given in the stem.
_________________

Let's get it right!!!!

Kudos [?]: 113 [0], given: 0

19 Nov 2004, 11:17
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In the past year, there has been a large drop in the number

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