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

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GMAT Club Legend
Joined: 07 Jul 2004
Posts: 5043
Location: Singapore
In the past year, there has been a large drop in the number [#permalink]

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15 Oct 2005, 13:17
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100% (02:40) correct 0% (00:00) wrong based on 3 sessions

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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 average price paid for a new car has risen dramatically.

Which of the following, if true, best explains the increase in the average price of a new car?
(A) The price of used cars has climbed steadily over the past ten years.
(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 car has been unaffected by the current economic conditions.
(D) Economic conditions are expected to get significantly worse before the end of the year.
(E) Low demand for trucks and vans has led to lower production in the factories.
Director
Joined: 21 Aug 2005
Posts: 789

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15 Oct 2005, 16:10
C

Market for expensive car is steady, so to contribute to the decline in the overall numbers of new cars sold, the sales of no-expensive new cars should have gone down. Hence, the proportion of expensive cars among all new cars has increased and so has the price.
15 Oct 2005, 16:10
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# In the past year, there has been a large drop in the number

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