Marketing Director: For our new computer to be profitable, it must bot

Question

Marketing Director: For our new computer to be profitable, it must both be accessible to a large number of purchasers and introduce significant new innovations over the previous model. However, the cost of the hardware to make the computer much more advanced than its predecessor will almost certainly necessitate a price point far above what almost all of our potential customers can afford.

The claims, if true, most strongly support which of the following conclusions?

A. The company should work to convince consumers that the innovations in the new model justify a significantly higher price point.

B. A computer model that has some, but not all, of the proposed innovations and that is only slightly more expensive than the current model is more likely to be successful.

C. The new computer model is unlikely to be profitable model for the company.

D. Reducing the price point of the proposed model will definitely prevent the company from making the technological innovations required for the model to be profitable.

E. Price and innovation are the two most important considerations in computer purchases.

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Abhiswarup · Answer

The passage says for a new computer to be profitable it must be advanced and have new innovations but it will increase its price point which most customers won't afford.

Analyzing the statements:
A. The company should work to convince consumers that the innovations in the new model justify a significantly higher price point.
This can be said as passage don't talk about price it only says it will lead to higher price point. Lets keep the option.
B. A computer model that has some, but not all, of the proposed innovations and that is only slightly more expensive than the current model is more likely to be successful.
This can't be obtained from the passage. Eliminate
C. The new computer model is unlikely to be profitable model for the company.
As the technological innovations proposed led to higher price point, one can say it won't be profitable. However one can't conclude that this decision would have been taken. Thus Eliminate
D. Reducing the price point of the proposed model will definitely prevent the company from making the technological innovations required for the model to be profitable. This can be obtained as if price point is reduced the company will have less amount for technological innovations

E. Price and innovation are the two most important considerations in computer purchases.
Innovation and availability are the two important considerations. Eliminate

Based on the statements of A & D. D is more logical.

Let me know your view.

Dereno · Answer

Let’s see the claims made by MD :

1. For a new computer to be profitable - larger base of customers (i.e.,) affordability is must.

2. New Technological Innovations compared to previous model.

3. Installing new hardware components demands a Higher purchase price for the components compared to previous prices.

4. The increased price will pull the demand down. Isolating more customers from making the purchase.

Options seems close at the first glance. Hence opting eliminating to find the suitable conclusion.  Provided the claims made above are true .

Options analysis:

E. Price and innovation are the two most important considerations in computer purchases.

Customers can look for colour, elegant design, apart from new features added compared to competitors models.. 
Eliminated.

A. The company should work to convince consumers that the innovations in the new model justify a significantly higher price point.

If a product drains the pocket of customer , and he has commitments to deliver. Even though the product is outstanding, the customer usually opts out. Hence, out of scope.

B. A computer model that has some, but not all, of the proposed innovations and that is only slightly more expensive than the current model is more likely to be successful.

An important feature which uplifts the product efficiency but is more costly. If the feature is removed, the performance of the products goes down. Profitability comes into question. Hence Eliminated.

We are left with two choices C and D.

D. Reducing the price point of the proposed model will definitely prevent the company from making the technological innovations required for the model to be profitable.

The MD has iterated that the upgrades require more advanced innovations which will cost more than normal. If u reduce the price point, either the required upgrades are not done. Or low cost equipments are used to seek profits. In either case, profitability will decline. So, Eliminated.

C. The new computer model is unlikely to be profitable model for the company.

With the claims being true. It’s hard to develop a product with tradeoffs. Hence  C is the correct answer.

This question is a perfect example of Catch 22 situation -  the term "Catch-22" perfectly describes a situation where you can't leave both options because the very act of trying to leave one prevents you from leaving the other. It's a paradoxical situation with no easy or logical escape.

Vibhatu · Answer

Please provide official solution  Bunuel

Aditya2931 · Answer

I eliminated D due to the word "definitely", rest my logic is exactly same as yours

Bunuel · Answer

Official explanation:

There are two requirements for success: innovation and accessibility. However, increasing one undermines the other. Thus, it will be difficult for the company to achieve both requirements, and the computer is unlikely to be profitable. This is the claim in choice (C).

Choice (A) contradicts the evidence given: that the cost of innovations (which are a requirement for success) will be above what most customers can afford to pay. Merely trying to convince the customers that the price point is justified does not make the computer affordable.

With choice (B), it is not possible to determine whether a computer that 'splits the difference' between the previous model and the proposed model would be successful. Are the innovations in this model 'significant' as defined above? You don't know. All that is known from the information given is that the new model described is unlikely to be successful.

Choice (D) would be correct if it used 'likely' instead of 'definitely.' However, the executive states that the innovations will almost certainly make the price point prohibitively high, but the possibility still exists that this may not happen.

Choice (E) would strengthen the statement that accessibility and innovation are required for profitability. However, it does not necessarily follow from the marketing executive's argument that these are the most important considerations to consumers.

Therefore, choice (C) is the correct answer.

Marketing Director: For our new computer to be profitable, it must bot

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Marketing Director: For our new computer to be profitable, it must bot

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