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Manufacturers of mechanical pencils make most of the profit

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Manufacturers of mechanical pencils make most of the profit [#permalink]

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26 Jul 2007, 05:22
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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.
[Reveal] Spoiler: OA

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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01 Dec 2010, 10:40
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Expert's post
artistocrat wrote:
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.

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.
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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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30 Jul 2007, 02:53
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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

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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01 Dec 2010, 11:11
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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..
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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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31 Mar 2016, 00:57
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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.
Attachments

Screen Shot 2016-03-31 at 12.56.56 AM.png [ 143.63 KiB | Viewed 4476 times ]

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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26 Jul 2007, 06:19
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.

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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29 Nov 2010, 20:31
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.

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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01 Dec 2010, 12:22
What's the OA?

asaf wrote:
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 studyiing 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.

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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02 Dec 2010, 20:06
Like Karishma stated, E seems to be better than B...
So I chose E.
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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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02 Dec 2010, 23:38
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.

akshathbs wrote:
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..

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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03 Dec 2010, 05:41
gettinit wrote:
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.

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.
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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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10 May 2015, 01:01
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
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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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18 Jan 2016, 15:04

If a market experiences increased demand, why wouldn't Write Company retain its market share and therefore sell more lead? That would be the most likely scenario in real life.

The fact that the new pencil model is of superior quality means very little. The world is full of high quality products which never sold. We know nothing about the price compared with the competition, for example, or whether there is any consumer awareness of the pencil's superiority, in other words there is no reason to believe it will sell well.

I would be so p****ed if I get such a poor question in my GMAT.

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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]

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16 Jun 2017, 04:40
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.

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Re: Manufacturers of mechanical pencils make most of the profit   [#permalink] 16 Jun 2017, 04:40
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