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Mall owner: Our mall's occupancy rate is so low that we are barely mak

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Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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Mall owner: Our mall's occupancy rate is so low that we are barely making a profit. We cannot raise rents because of unacceptably high risk of losing our tenants. On the other hand, a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there stands empty. Clearly, therefore, to increase profits we must sign up new tenants.

Which of the following, if true, weakens the argument?

(A) The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up.

(B) The mall is located in a geographic area where the costs for air conditioning in the summers far exceed the cost of heating during the mild winters.

(C) The mall's occupancy rate though low, has been relatively stable during the last few years.

(D) The mall lost tenants as a result of each of the two drastic rent increases that have occurred here.

(E) None of the established tenants is likely to need additional floor space in the near future.

GMATPrep Code : VCR000379

The conclusion of the argument is that to increase profits, the mall should sign up new tenants.
We must find something that says that even after the addition of new tenants, the profits will not go up.

However, after scanning the answer choices, I could not find any which could weaken this conclusion. However, choice A, an alternate means to achieving this goal is the correct answer.

Could you explain why this is so? Clearly this is not a causal argument

Originally posted by 12bhang on 18 Jul 2013, 06:09.
Last edited by hazelnut on 18 Jul 2017, 22:38, edited 5 times in total.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 18 Jul 2013, 08:54
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12bhang wrote:
Mall owner: Our mall's occupancy rate is so low that we are barely making a profit. We cannot raise rents because of unacceptably high risk of losing our tenants. On the other hand,a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there free. Clearly, therefore, to increase profits we must sign up new tenants.

Which of the following, if true, weakens the argument:

A) The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up.

b)The mall is located in a geographic area where the costs for air conditioning in the summers far exceed the cost of heating during the mild winters.

C)The mall's occupancy rate though low, has been relatively stable during the last few years.

D)The mall lost tenants as a result of each of the two drastic rent increases that have occured here.

E)None of the established tenants is likely to need additional floor space in the near future.

The conclusion of the argument is that to increase profits, the mall should sign up new tenants.
We must find something that says that even after the addition of new tenants, the profits will not go up.

However, after scanning the answer choices, I could not find any which could weaken this conclusion. However, choice A, an alternate means to achieving this goal is the correct answer.

Could you explain why this is so? Clearly this is not a causal argument


Hi,

Narenn has very aptly explained the reason why choice A is the answer. The keyword here is "must" - the conclusion says that there is only way to increase profits i.e. by signing up new tenants. Now, in this case. anything that suggests another way to increase profits would be valid weakener. Option A does the same by focusing on reduction of costs. Another way to weaken is by suggesting a way to increase revenues without signing up new tenants.

The key to solving all CR questions is the ability to fully understand the conclusion of the argument. If you rejected option A because it is presenting an alternate way to achieve the result and the argument is not causal, then you are depending too much on frameworks and rules. You need to think on your feet. Think smartly. Think what exactly the conclusion is saying. The most important word here was "must" and if you had grasped that, the question of rejecting option A would not have arisen.

If the conclusion had been:

We can increase profits by signing up new tenants.

In such a case, option A would not be the correct answer, as my article on Alternate cause explains.

Hope this helps.

Regards,
Chiranjeev
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 18 Jul 2013, 06:55
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12bhang wrote:
Mall owner: Our mall's occupancy rate is so low that we are barely making a profit. We cannot raise rents because of unacceptably high risk of losing our tenants. On the other hand,a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there free. Clearly, therefore, to increase profits we must sign up new tenants.

Which of the following, if true, weakens the argument:

A) The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up.

b)The mall is located in a geographic area where the costs for air conditioning in the summers far exceed the cost of heating during the mild winters.

C)The mall's occupancy rate though low, has been relatively stable during the last few years.

D)The mall lost tenants as a result of each of the two drastic rent increases that have occurred here.

E)None of the established tenants is likely to need additional floor space in the near future.

The conclusion of the argument is that to increase profits, the mall should sign up new tenants.
We must find something that says that even after the addition of new tenants, the profits will not go up.

However, after scanning the answer choices, I could not find any which could weaken this conclusion. However, choice A, an alternate means to achieving this goal is the correct answer.

Could you explain why this is so? Clearly this is not a causal argument


While concluding that to increase profits we must sign up new tenants, it is assumed that signing new tenants is the only way to increase the profits. To weaken the conclusion we need to attack this assumption. The choice that would suggest any alternate way of increasing profit would be correct.

A) By consolidating rented spaces we can cut down the operating cost, thereby can increase the profit - no matter by what proportion will it be. So this choice is suggesting an alternate way to increase profits. This can undermine the conclusion. CORRECT

B) Cost of air conditioning the mall is more than heating it. Irrelevant. INCORRECT

C) Mall's occupancy rate has been consistently low. Hence minor profit. INCORRECT

D) This choice suggest that you can not increase the profit my increasing the rate but does not suggest any alternate way to do so. INCORRECT

E) Existing tenants will not sign new contracts for additional floor space. Out of Scope. INCORRECT
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 26 Dec 2013, 23:00
Thank you Chiranjeev for the very nice explanation.
I too had made the mistake to not consider "Must" in the argument.
The takeaway from this question is always read the conclusion in detail and dont miss out on small details in the conclusion.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 27 Dec 2013, 07:15
I used POE to find the Answer.
sometime wording is difficult to understand .
so better to scan other options.
in this case other choices were easier to eliminate..
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 27 Dec 2013, 08:59
Mall owner: Our mall's occupancy rate is so low that we are barely making a profit. We cannot raise rents because of unacceptably high risk of losing our tenants. On the other hand,a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there free. Clearly, therefore, to increase profits we must sign up new tenants.

The following emerges-
Premise- The mall has empty spaces.
Premise- Operating costs remain same for fully occupied mall or one with spaces, as here.
Conclusion- To increase profits we must sign up new tenants.

Ans should give alternative that can increase profits.

A) The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up.

This suggests an alternative. Signing new tenants is not a must for profit making anymore !!!! Correct answer...
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 30 Jul 2014, 01:56
I narrowed this one down to A and D. In other words, I reached one of the hardest steps in solving CR questions: find which one is better!

I discarded D because of only one word "drastic". So, previously the mall imposed some drastic increases in rent. Consequently, the mall lost tenants. However, the argument does not imply whether the owner intends to increase the rent for 10% or for 100%. While it is true that answer choice D is a contender and a trap answer, it fails the "one word" test.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 22 Dec 2014, 09:17
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Mall owner: Our mall's occupancy rate is so low that we are barely making a profit. We cannot raise rents because of unacceptably high risk of losing our tenants. On the other hand,a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there free. Clearly, therefore, to increase profits we must sign up new tenants.

Which of the following, if true, weakens the argument:

A) The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up.

b)The mall is located in a geographic area where the costs for air conditioning in the summers far exceed the cost of heating during the mild winters.

C)The mall's occupancy rate though low, has been relatively stable during the last few years.

D)The mall lost tenants as a result of each of the two drastic rent increases that have occured here.

E)None of the established tenants is likely to need additional floor space in the near future.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 13 Jan 2015, 07:48
IMO A. If the rented spaces are re-organised and entire wing vacated, the rent for that wing wld not have to be paid thereby giving improved cost efficiency and no need for additional tenants.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 06 Sep 2015, 04:00
igormkd wrote:
I narrowed this one down to A and D. In other words, I reached one of the hardest steps in solving CR questions: find which one is better!

I discarded D because of only one word "drastic". So, previously the mall imposed some drastic increases in rent. Consequently, the mall lost tenants. However, the argument does not imply whether the owner intends to increase the rent for 10% or for 100%. While it is true that answer choice D is a contender and a trap answer, it fails the "one word" test.

D can be eliminated with this reasoning -
the argument is saying we cannot raise rents. So raising rent is ruled out. In addition, D talks about the past. hence we can eliminate it.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 18 Apr 2016, 14:22
Mall's occupancy rate is low that we are barely making a profit. We cannot raise rents because of unacceptably high risk of losing our tenants. On the other hand,a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there free. Clearly, therefore, to increase profits we must sign up new tenants.

Which of the following, if true, weakens the argument:

A) The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up......................so this option indicates that it is not must to sign up tenants, mall can increase it s profits by decreasing existing costs as well. Thus weakener.

b)The mall is located in a geographic area where the costs for air conditioning in the summers far exceed the cost of heating during the mild winters.............so certain costs cannot be reduced and signing up new tenants is preferred. opposite......i.e., strengthener

C)The mall's occupancy rate though low, has been relatively stable during the last few years...............we need a change or a reason behind the same. This does not affect the conclusion.

D)The mall lost tenants as a result of each of the two drastic rent increases that have occurred here..............this instance supports the argument info but does not say anything regarding the conclusion.

E)None of the established tenants is likely to need additional floor space in the near future.........floor space is out of concern here.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 20 Apr 2016, 02:19
The Hackneyed but not worn out RULE OF THUMB for weakening a cause-effect argument is.

Opposite effect and Alternate cause weakens the conclusion.

A is an alternative cause.
Reducing cost might effectively increase profit even without increasing revenue.

Now that's microeconomics.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 10 Jul 2016, 13:18
This is an easy A.

remember profits = revenue - expenses. The mall owner is looking on revenue side by having more tenants however A is stating that a cost cutting reduction can be made that could also increase profits.

Finally, an question testing some business concepts for a business school extrance exam :)
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 10 Jul 2016, 14:12
Hi. Can anyone explain why D is wrong and A is correct

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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 04 Oct 2016, 08:10
Can someone help me explain the meaning of "On the other hand,a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there free"?? :(
If a mall is fully occupied how can it have a rental space available at all?
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 06 Oct 2016, 04:20
Yes I can.
It means this...
It is the same maintenance cost that you incur if the mall is full that you also going to incur if the mall is not occupied here and there.

Now A said the current occupants could be arranged in such a way that AN ENTIRE WING IS CLOSED UP. Now the here and there problem isn't there anymore. And you don't have to incur any cost on a completely closed up wing. No cleaners. No electricity for it. Water supply etc. You just cut off the cost.
PS: I suggest you face SC section first. Leave CR for now. Come back when you begin to ace SC

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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 22 Oct 2016, 09:35
Narenbabu wrote:
Hi. Can anyone explain why D is wrong and A is correct

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REPLY :

D)The mall lost tenants as a result of each of the two drastic rent increases that have occured here.
The conclusion of the argument is that "to increase profits we must sign up new tenants."
In order to weaken the argument we have to negate the conclusion.
Here, argument already considers that increasing rent not an option due to risk of losing tenants, so D cannot be the answer.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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New post 15 Dec 2016, 20:21
Profits = Revenues(rents from tenants) - cost(operational costs)
To increase profits, we can either increase revenues or decrease costs.
Option A tells us that operational costs can be reduced by keeping the revenues(tenants) constant resulting in increased profits.
An alternative to the conclusion.
Hence, A weakens the conclusion.
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Re: Mall owner: Our mall's occupancy rate is so low that we are barely mak  [#permalink]

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