Manufacturers of mechanical pencils make most of the profit

Question

Manufacturers of mechanical pencils make most of the profit on pencil leads rather than on the pencils themselves. The Write Company, which cannot sell its leads as cheaply as other manufacturers can, plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead, which will be sold at the same price as the Write Company's current lead.

Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads?

(A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available.

(B) Annual sales of mechanical pencils are expected to triple over the next five years.

(C) A Write Company executive is studying ways to reduce the cost of manufacturing pencil leads.

(D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer.

(E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used.

KarishmaB · Accepted Answer

Yes, I do agree with you. The product, though superior is more expensive. So there is no guarantee that its sales will increase. Also, in its own way, even B strengthens the argument. If overall sales increase, there is a good chance that this company's sales will also increase.

But, if you need to make the best of a given question, it would be good to note that E strengthens the argument more than B. B gives you an outside factor that could increase the sales. E is an inherent quality of the product that could increase sales.

StartupAddict · Answer

Very weakly worded question. Where did you find this one?

The underlying assumption is that most people buy this particular mechanical pencil..... A-D have nothing to do with that. E addresses it directly, although it's not 100% as just because it's a superiour car, doesn't mean most people buy it etc...... ie a Ferrari is a superiour car, or a Lamborghini, but most people can't afford it =P

shmegs · Answer

The assumption is that people will buy more of the new pencil type in the future. (E) gives a reason why more people would buy the new Wright pencil.

(B) is tempting but it doesn't offer any information regarding Wright pencils and there is no reason to assume that Wright sales will increase with the market.

artistocrat · Answer

This question can be found in GMATPrep>Practice Content>Review Questions>Q.14

I agree that just because a product is superior doesn't guarantee an increase in sales. You could just as easily argue that if the market for mechanical pencils expands, assuming market share is constant, then there will be an increase in sales as in B.

For these reasons, I believe that the question is poorly written.

akshathbs · Answer

Yes, I do agree with you. The product, though superior is more expensive. So there is no guarantee that its sales will increase. Also, in its own way, even B strengthens the argument. If overall sales increase, there is a good chance that this company's sales will also increase.

But, if you need to make the best of a given question, it would be good to note that E strengthens the argument more than B. B gives you an outside factor that could increase the sales. E is an inherent quality of the product that could increase sales.

nice explanation ..+1 to you..

also in B if sales triple may be the company metioned is not the one to be benifited , may be some other company
will sweep the market because of several reasons for ex lesser cost ,better quality etc..so clearly E wins..

also in B if sales triple may be the company metioned is not the one to be benifited , may be some other company will sweep the market because of several reasons for ex lesser cost ,better quality etc..so clearly E wins..

gettinit · Answer

I believe the argument says the lead is more expensive but not mechanical pencil itself is more expensive. The argument has to do with selling more pencils through which more lead would be sold at a more expensive price. E suggests more pencils will be sold because they are superior (not more expensive), hence leading to an increase in pencil lead sold.

KarishmaB · Answer

I do agree with you. The argument does say that the company's lead is more expensive than the pencil. But it is a matter of interpretation. Using the pencil will be more expensive than using some other pencil because it will take only the expensive lead. e.g. if you go to buy a humidifier, you will check out the cost of its filter too before you buy it since you will need to regularly replace it. If the humidifier is the same cost as others but the filter is more expensive, using that particular humidifier becomes more expensive. Hence, effectively their product, the new mechanical pencil, is going to be more expensive than others (assuming the cost of the pencil itself is similar to others). Since they are superior, they have a better chance of experiencing higher sales, nevertheless.

kinjiGC · Answer

Conclusion : Write Company's projection that its plan will lead to an increase in its sales of pencil leads
Premise : WC's pencil will accept only pencil leads manufactured by WC .

(A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available ->  Doesn't impact WC's pencil leads

(B) Annual sales of mechanical pencils are expected to triple over the next five years. ->  What about WC's pencil sales?

(C) A Write Company executive is studying ways to reduce the cost of manufacturing pencil leads. ->  OFS

(D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer.->  OFS. We are concerned with WC's sales

(E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used. ->  Correct

mcelroytutoring · Answer

Attached is a visual that should help. Please note that answer choice B is not correct because it is not *the plan itself* that would lead to the increase in sales, but instead, general market trends.

mihir0710 · Answer

Manufacturers of mechanical pencils make most of the profit on pencil leads rather than on the pencils themselves. The Write Company, which cannot sell its leads as cheaply as other manufacturers can, plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead, which will be sold at the same price as the Write Company's current lead.

Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads? 
 
So the company has linked the sales of its leads with the sales of its pencils (Mechanical Pencils - MP) by changing the design of its pencil to accept only its own leads.
So to support projection that the sales of the leads will increase, we need to somehow prove that the sales of the pencils will increase ... 
 
(A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available. 
 Incorrect because we are not told anywhere in the argument that the WC's MP are least expensive ... 
 
(B) Annual sales of mechanical pencils are expected to triple over the next five years. 
 I was about to mark this option but then realize that the option does NOT specifies which company's MP's sales will triple... It may be the case that WC's sales does NOt cchange at all but all other company's sales triple

(C) A Write Company executive is studying ways to reduce the cost of manufacturing pencil leads. 
 Great ...let him study ...come back when he finds a solution (if at all he does !!!)

(D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer. 
 So what happened to the rival manufacturer ..did he succeed ?? Not mentioned anywhere...

(E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used.
 Important word :  MP's users  found that the WC's MP are superior..means they like the product and are more likely to buy WC's MP than others...
So, definitely supports the company's projection.

emcheeks · Answer

IMO, E is not the perfect answer but I can see why B is wrong:

Notice that the question is asking you why   this plan   (newly designed pencil) will be successful.

If B is the case, then we can argue that any pencils including the existing pencils, newly designed pencils, etc. will increase in sales.  But that doesn't specifically limit to "this plan"  since the stem is only asking how "this plan" will succeed. And  E specifically talks about a characteristic of the  new pencil   that might attribute to sales. Even though E is not perfect, we can still get this answer by POE.

Here is the  official explanation  if anyone is interested  even though IMO they could have done better explaining this problem..

B. It is not clear whether, if this predicted outcome were to occur, it would help or hinder
the Write Company in selling more of its pencil leads. For all we know, the Write
Company's pencil and leads could become less price-competitive compared with those
of other firms.

E. Correct. This information suggests that sales of the Write Company's redesigned
pencil may increase (or at least will probably not significantly decrease), that many
consumers will find the company's pencils worth the additional expense of refilling
them with Write Company leads, and that consequently the company's plan to
increase lead sales will succeed.

mba757 · Answer

Conclusion : “plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead,  .”
 Prethink : what is the proof that this pencil mechanical pencil will even sell well? If there was some proof that it would sell well, it would strengthen the argument. 
 Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads?
 
(A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available.
 Opposite, weakener if anything. Write Company pencils would probably not be the cheapest, definitely not in the long run (because the lead would be a variable cost and since that cost would be higher than that of all other manufacturers it would be more expensive to have this pencil).
 
(B) Annual sales of mechanical pencils are expected to triple over the next five years.
 Pertinent info but neutral effect – this keeps the argument/conclusion leveled out. If, however, they mentioned this and gave a reason, which pointed to something that only this newly designed mechanical pencil possessed, it would probably strengthen. But it does not. It doesn’t say that the its   PLAN will lead to an increase in its sales of pencil leads.
 
(C) A Write Company executive is studying ways to reduce the cost of manufacturing pencil leads.
 Out of scope – this doesn’t affect the conclusion. It doesn’t matter what this guy is studying. What if he studies and nothing comes out of it? It would bring you to the same point in which the argument is currently. Moreover, this isn’t even related to the plan per se. 
 
(D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer.
 Opposite, if anything. If another company did this, maybe it has some benefits that no other manufacturer’s pencils have; therefore, it would take away some sales from the Write Company, weakening the argument. 
 
(E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used.
 This matches the prethink. It gives us a reason why this conclusion might work. Why the Write Company’s projection that its plan will lead to an increase in lead sales would work. This isn’t airtight because there could be potential pitfalls with the test marketing, but this would certainly strengthen if the tests were done well.

ameyaagrawal · Answer

Careful study of argument will help you realize that,

For company A
 
Now only X type of pencil will support X type of leads.
Company A cannot make Y types of leads so they wont sell anyway.

Now we want to prove that Company A will have increase in sales of X types of Leads

Apply your quant logic.
 
If X types of leads needs to be increased which is dependent on X type of Pencil only  ( Apply constraints. X pencil support X lead) , then only way to increase Sales of X type of Leads is to increase sales of X type of Pencil.

Option E is just that.

Option B says,  sales of A, B, X, Y, Z type of pencil can inrease. But we know to keep the sum constant, any of A, B, X, Y, Z can be increaesed or decreased

celan · Answer

Manufacturers of mechanical pencils make most of the profit on pencil leads rather than on the pencils themselves. The Write Company, which cannot sell its leads as cheaply as other manufacturers can, plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead, which will be sold at the same price as the Write Company's current lead.

Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads?

P : most profit comes from pencil lead
P : Write Company plans to alter the design
 Assumption? People will not quit using the Write company's pencil just because the pencil does not accommodate other pencil leads.
 The newly developed pencil lead will be profitable.
C : Company's plan will lead to an increase in its sales

A. The new Write Company pencil will be introduced at a price higher than the price the Write Company charges for its current model.
-> Weaken, This option states that there will be fewer people who try new the pencil.

B. In the foreseeable future, manufacturers of mechanical pencils will probably have to raise the prices they charge for mechanical pencils.
-> Irrelevant, we are talking about pencil leads not pencils.

C. The newly designed Write Company lead will cost somewhat more to manufacture than the Write Company’s current lead does.
-> Weaken, This option casts doubt on the assertion that the new pencil lead will be profitable.

D. A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer.
-> Irrelevant, we only want to know what will happen to the Write company, not other companies.

E. In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used.
-> Correct, this option implies that more people will try the new pencil and therefore will have to use a new pencil lead.

ashmit99 · Answer

ChiranjeevSingh

I was confused between B and E. Although I chose E, I had no strong reason to reject B. Do you think B and E have the same direction but different magnitude? Can you please explain why would you choose E over B?

Thanks in advance!

Thanks in advance!

ChiranjeevSingh · Answer

B has no impact. How does it support that "the company's plan" will lead to an increase in its sales?

We need to support that X will lead to Y. B just indicates that Y will happen.

kittle · Answer

The OFFICIAL reasoning for the correct answer choice (E):

What point supports the plan’s success? It is clear that increased lead sales are directly tied to the sales and ongoing use of the new pencil that can use only that type of lead. If the new pencils sell well and then get used frequently, the buyers will need to purchase leads regularly. If thorough test marketing has shown that potential buyers find the new pencil greatly superior to use, then the pencil buyers will have to purchase the only available leads that fit their pencils, no matter whether the leads are more expensive, and the projection that sales of these pencil leads will increase is strengthened.

Hope this helps.

Aryabhatta2me · Answer

Here lot of people says that E is written in an unclear way, at first I also felt the same.
But if we see the wording it's say company has kept the price same and user has experienced it better than other company product.
"many has compared that even lambogini has better experience than other but that doesn't mean it's experience will increase sale than other".
but idea is whether lamborgini will increase it's sale or not if customer of lamborgini will find better experience on same price, of course sale would increase over the time.
That's why E is the correct answer.

AnkurGMAT20 · Answer

Bunuel , can you please tag this question under OG 2022?

Manufacturers of mechanical pencils make most of the profit

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Manufacturers of mechanical pencils make most of the profit

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