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25 Mar 2020, 16:25
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Difficulty:
5%
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Question Stats:
90% (01:31) correct
10%
(02:34)
wrong
based on 146
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Moon Incorporated produces and distributes the same hubcaps as Sun Incorporated. Steel procurement amounts to about 50 percent of the costs required to produce these hubcaps at both Moon Incorporated and Sun Incorporated. Moon Incorporated is looking to increase its market share at the expense of Sun Incorporated. Thus, pursuant to this end, Moon Incorporated should procure less expensive steel.
Which of the following, if true, would most weaken the argument above?
A) Because they operate in an industry in which workers are members of powerful unions, hubcap producers cannot easily reduce the wages they pay employees.
B)Less expensive steel would be of a lower quality, and this lower quality would result in lower demand for Moon hubcaps.
C)Sun Incorporated has taken a significant portion of Moon Incorporated’s market share in the last several years.
D)Moon Incorporated buys its steel at a price that is, on average, 5 percent higher than the price does Sun Incorporated.
E)Many raw material providers that source steel to manufacturers have no alternative industries to supply.
Source: Ready4GMAt
Which of the following, if true, would most weaken the argument above?
A) Because they operate in an industry in which workers are members of powerful unions, hubcap producers cannot easily reduce the wages they pay employees.
B)Less expensive steel would be of a lower quality, and this lower quality would result in lower demand for Moon hubcaps.
C)Sun Incorporated has taken a significant portion of Moon Incorporated’s market share in the last several years.
D)Moon Incorporated buys its steel at a price that is, on average, 5 percent higher than the price does Sun Incorporated.
E)Many raw material providers that source steel to manufacturers have no alternative industries to supply.
Source: Ready4GMAt
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30 Mar 2020, 06:12
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Conclusion: Moon Inc is looking to increase profit margin to compete with Sun Inc.. Moon Inc plans to do so by buying cheaper steel as it constitutes 50% of the cost. To WEAKEN this conclusion, we have to look for an answer option which says this strategy at best is ineffective and at worst is detrimental to the company.
A) Because they operate in an industry in which workers are members of powerful unions, hubcap producers cannot easily reduce the wages they pay employees. => Out-of-scope. Doesn't have any relevance to the plan whether to buy cheap steel or not
B)Less expensive steel would be of a lower quality, and this lower quality would result in lower demand for Moon hubcaps. -- CORRECT. Less expensive steel will result in poorer sales and will backfire at Moon Inc
C)Sun Incorporated has taken a significant portion of Moon Incorporated’s market share in the last several years. -- Extraneous background info
D)Moon Incorporated buys its steel at a price that is, on average, 5 percent higher than the price does Sun Incorporated. -- Strengthening, gives all the more reason to Moon Inc for buying less expensive steel
E)Many raw material providers that source steel to manufacturers have no alternative industries to supply. -- We have no interest in alternative industries! Irrelevant info.
A) Because they operate in an industry in which workers are members of powerful unions, hubcap producers cannot easily reduce the wages they pay employees. => Out-of-scope. Doesn't have any relevance to the plan whether to buy cheap steel or not
B)Less expensive steel would be of a lower quality, and this lower quality would result in lower demand for Moon hubcaps. -- CORRECT. Less expensive steel will result in poorer sales and will backfire at Moon Inc
C)Sun Incorporated has taken a significant portion of Moon Incorporated’s market share in the last several years. -- Extraneous background info
D)Moon Incorporated buys its steel at a price that is, on average, 5 percent higher than the price does Sun Incorporated. -- Strengthening, gives all the more reason to Moon Inc for buying less expensive steel
E)Many raw material providers that source steel to manufacturers have no alternative industries to supply. -- We have no interest in alternative industries! Irrelevant info.
30 Mar 2020, 06:24
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Moon Incorporated produces and distributes the same hubcaps as Sun Incorporated. Steel procurement amounts to about 50 percent of the costs required to produce these hubcaps at both Moon Incorporated and Sun Incorporated. Moon Incorporated is looking to increase its market share at the expense of Sun Incorporated. Thus, pursuant to this end, Moon Incorporated should procure less expensive steel.
Which of the following, if true, would most weaken the argument above?
since hubcaps are same, their quality must be same and to increase the market share moon inc has to either reduce price or improve quality. less expensive steel will reduce the production cost and further decrease the price but it has to of same quality. If some how it can be establish that product is of inferior quality it will weaken the argument.
Letsslee now
A) Because they operate in an industry in which workers are members of powerful unions, hubcap producers cannot easily reduce the wages they pay employees. :- It has nothing to do with wage, out of scope
B)Less expensive steel would be of a lower quality, and this lower quality would result in lower demand for Moon hubcaps. :- Low quality results in lower demand this is in line with our pre thinking
C)Sun Incorporated has taken a significant portion of Moon Incorporated’s market share in the last several years. :- It doesn't matter who owns moon corporation, we are talking about market share here.
D)Moon Incorporated buys its steel at a price that is, on average, 5 percent higher than the price does Sun Incorporated. :- Opposite of what we need, this will not weaken the argument
E)Many raw material providers that source steel to manufacturers have no alternative industries to supply.:- Again out of scope, raw material supplier will provide both companies it has no effect on argument.
Which of the following, if true, would most weaken the argument above?
since hubcaps are same, their quality must be same and to increase the market share moon inc has to either reduce price or improve quality. less expensive steel will reduce the production cost and further decrease the price but it has to of same quality. If some how it can be establish that product is of inferior quality it will weaken the argument.
Letsslee now
A) Because they operate in an industry in which workers are members of powerful unions, hubcap producers cannot easily reduce the wages they pay employees. :- It has nothing to do with wage, out of scope
B)Less expensive steel would be of a lower quality, and this lower quality would result in lower demand for Moon hubcaps. :- Low quality results in lower demand this is in line with our pre thinking
C)Sun Incorporated has taken a significant portion of Moon Incorporated’s market share in the last several years. :- It doesn't matter who owns moon corporation, we are talking about market share here.
D)Moon Incorporated buys its steel at a price that is, on average, 5 percent higher than the price does Sun Incorporated. :- Opposite of what we need, this will not weaken the argument
E)Many raw material providers that source steel to manufacturers have no alternative industries to supply.:- Again out of scope, raw material supplier will provide both companies it has no effect on argument.
