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# Online retail giant Amazon.com has joined the price war of

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Senior Manager
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Online retail giant Amazon.com has joined the price war of [#permalink]

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17 Jan 2014, 06:07
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Online retail giant Amazon.com has joined the price war of e-book readers, cutting the price of its popular 3G Kindle reader by more than a quarter. In doing so, it hopes to boost sales of the Kindle. The Kindle is available at a new price of $189, down from the previous$259. Amazon’s move came hours after Barnes and Noble, the largest bookseller in the US, reduced the price of its 3G Nook e-book reader from $259 to$199.

Which of the following, if true, would suggest that, contrary to expectations, Amazon.com’s Kindle sales will not increase?

A)The lower price will make the sale of Amazon’s e-book reader in developing countries a viable option.

B)The cost of 3G connectivity is projected to decline over the next few months.

C)Barnes and Noble is offering a 10% discount to all its customers whose shopping bill exceeds $150. d)The slash in the prices will force Amazon to slash many benefits it offers its employees. E)Barnes and Noble is considering further reducing the price of its e-book readers. [Reveal] Spoiler: OA Last edited by guerrero25 on 17 Jan 2014, 20:40, edited 1 time in total. If you have any questions you can ask an expert New! Senior Manager Joined: 20 Dec 2013 Posts: 268 Location: India Followers: 0 Kudos [?]: 89 [2] , given: 29 Re: Online retail giant Amazon.com has joined the price war of [#permalink] ### Show Tags 17 Jan 2014, 10:07 2 This post received KUDOS Option C. If B&N gives additional 10% discount on$199,the final price would be less than Amazon's product.The argument that price-reduction will boost sales is,hence,weakened.

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Re: Online retail giant Amazon.com has joined the price war of [#permalink]

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17 Jan 2014, 11:16
guerrero25 wrote:
Online retail giant Amazon.com has joined the price war of e-book readers, cutting the price of its popular 3G Kindle reader by more than a quarter. In doing so, it hopes to boost sales of the Kindle. The Kindle is available at a new price of $189, down from the previous$259. Amazon’s move came hours after Barnes and Noble, the largest bookseller in the US, reduced the price of its 3G Nook e-book reader from $259 to$199.

Which of the following, if true, would suggest that, contrary to expectations, Amazon.com’s Kindle sales will not increase?

A)The lower price will make the sale of Amazon’s e-book reader in developing countries a viable option.

B)The cost of 3G connectivity is projected to decline over the next few months.

C)Barnes and Noble is offering a 10% discount to all its customers whose shopping bill exceeds $150. d)The slash in the prices will force Amazon to slash many benefits it offers its employees. E)Barnes and Noble is considering further reducing the price of its e-book readers. OA will follow I will go with E. what's the OA by the way? Intern Joined: 28 Oct 2012 Posts: 23 Concentration: Technology, Real Estate Followers: 1 Kudos [?]: 58 [1] , given: 43 Re: Online retail giant Amazon.com has joined the price war of [#permalink] ### Show Tags 17 Jan 2014, 11:50 1 This post received KUDOS Online retail giant Amazon.com has joined the price war of e-book readers, cutting the price of its popular 3G Kindle reader by more than a quarter. In doing so, it hopes to boost sales of the Kindle. The Kindle is available at a new price of$189, down from the previous $259. Amazon’s move came hours after Barnes and Noble, the largest bookseller in the US, reduced the price of its 3G Nook e-book reader from$259 to $199. Which of the following, if true, would suggest that, contrary to expectations, Amazon.com’s Kindle sales will not increase? A)The lower price will make the sale of Amazon’s e-book reader in developing countries a viable option. out of scope. B)The cost of 3G connectivity is projected to decline over the next few months. 3G is offered by both the devices. Hence does not affect the argument. C)Barnes and Noble is offering a 10% discount to all its customers whose shopping bill exceeds$150.
Nook will cost $199 * %90 ~=$179, which is less than Kindle ( $189 ) d)The slash in the prices will force Amazon to slash many benefits it offers its employees. out of scope. E)Barnes and Noble is considering further reducing the price of its e-book readers. further reducing the price? by how much ?$1?
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Re: Online retail giant Amazon.com has joined the price war of [#permalink]

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17 Jan 2014, 13:43
1
KUDOS
IMO, it should be C. Explanation follows:

We have to find out a factor that can resolve the dilemma: despite offering a lower price ($189) for their e-book reader than Barnes and Noble, Amazon, contrary to popular expectations, will not be able to increase their sales A)Does quite the opposite thing- if this is true, the the sales should actually increase. Eliminate A B)Same as A. If it were true, the price would have been increased. Eliminate B C)Seems Viable. Let's keep it for the moment. d) Does not make sense. Whatever happens to employees does not have a direct correlation with sales. Again, you can't assume anything beyond the given premise E) Well, seems lucrative in the first look. But it does not quantify the possible reduction and hence thus not ensure that Amazon will not have increase in sales. So eliminate E too. The only option left is C. In fact, this should be the answer. By offering 10% discount, Barnes and Noble will be able to sell their e-book reader at a far cheaper price than that of Amazon. Senior Manager Status: Student Joined: 26 Aug 2013 Posts: 259 Location: France Concentration: Finance, General Management Schools: EMLYON FT'16 GMAT 1: 650 Q47 V32 GPA: 3.44 Followers: 2 Kudos [?]: 63 [1] , given: 401 Re: Online retail giant Amazon.com has joined the price war of [#permalink] ### Show Tags 17 Jan 2014, 13:49 1 This post received KUDOS guerrero25 wrote: Online retail giant Amazon.com has joined the price war of e-book readers, cutting the price of its popular 3G Kindle reader by more than a quarter. In doing so, it hopes to boost sales of the Kindle. The Kindle is available at a new price of$189, down from the previous $259. Amazon’s move came hours after Barnes and Noble, the largest bookseller in the US, reduced the price of its 3G Nook e-book reader from$259 to $199. Which of the following, if true, would suggest that, contrary to expectations, Amazon.com’s Kindle sales will not increase? A)The lower price will make the sale of Amazon’s e-book reader in developing countries a viable option. B)The cost of 3G connectivity is projected to decline over the next few months. C)Barnes and Noble is offering a 10% discount to all its customers whose shopping bill exceeds$150.

d)The slash in the prices will force Amazon to slash many benefits it offers its employees.

E)Barnes and Noble is considering further reducing the price of its e-book readers.

OA will follow

C fits best. B&N is offering an advantage of 10% on $150. Which means a$15 reduction.

$199-15=$184; Therefore the B&N E-book will be cheapest.

OA?
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Re: Online retail giant Amazon.com has joined the price war of [#permalink]

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18 Jan 2014, 06:45

Watch out. It is 10% on $150! Hope it helps! _________________ Think outside the box Manager Joined: 25 Oct 2013 Posts: 169 Followers: 1 Kudos [?]: 59 [0], given: 56 Re: Online retail giant Amazon.com has joined the price war of [#permalink] ### Show Tags 18 Jan 2014, 08:11 Paris75 wrote: gmatprav wrote: This seems more of a PS question . C it is. Barnes and nobles price after 10% discount on 199 will be 179.1$ which is less than Kindle.

Watch out. It is 10% on $150! Hope it helps! Actually it is 10% on bill amt if it is > 150$. So discount is on 199.
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Re: Online retail giant Amazon.com has joined the price war of [#permalink]

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18 Jan 2014, 08:44
gmatprav wrote:
Paris75 wrote:
gmatprav wrote:
This seems more of a PS question . C it is. Barnes and nobles price after 10% discount on 199 will be 179.1$which is less than Kindle. Watch out. It is 10% on$150!

Hope it helps!

Actually it is 10% on bill amt if it is > 150$. So discount is on 199. Could be$151...

Stick to the lowest value: $150 ! hope it helps Since we have a known the bill amount the discount will be on that amount not 150. calculating discount on 150 is in fact inaccurate. Not sure why you would calculate discount on 150. _________________ Click on Kudos if you liked the post! Practice makes Perfect. Senior Manager Joined: 04 May 2013 Posts: 355 Location: India Concentration: Operations, Human Resources Schools: XLRI GM"18 GPA: 4 WE: Human Resources (Human Resources) Followers: 3 Kudos [?]: 126 [0], given: 70 Re: Online retail giant Amazon.com has joined the price war of [#permalink] ### Show Tags 18 Jan 2014, 22:19 MY ANSWER IS ALSO "C" BUT LOGIC DIFFERENT--------Online retail giant Amazon.com has joined the price war of e-book readers, cutting the price of its popular 3G Kindle reader by more than a quarter. In doing so, it hopes to boost sales of the Kindle. The Kindle is available at a new price of$189, down from the previous $259. Amazon’s move came hours after Barnes and Noble, the largest bookseller in the US, reduced the price of its 3G Nook e-book reader from$259 to $199. Which of the following, if true, would suggest that, contrary to expectations, Amazon.com’s Kindle sales will not increase? A)The lower price will make the sale of Amazon’s e-book reader in developing countries a viable option....AS PER THIS THE SALE WILL INCREASE....WE ARE LOOKING AT DECREASE..... B)The cost of 3G connectivity is projected to decline over the next few months. BOTH ARE 3 G .... BOTH CAN DECLINE ...GIVES NO COST ADVANTAGE / DISADVANTAGE TO Amazon.com’s Kindle sales . C)Barnes and Noble is offering a 10% discount to all its customers whose shopping bill exceeds$150......MATHEMATICALLY ...Barnes and Noble WILL COST LESS NOW....HENCE CORRECT ANSWER.

d)The slash in the prices will force Amazon to slash many benefits it offers its employees.THAT'S THE FIRMS INTERNAL MATTER....WE ARE TALKING OF COSTS....

E)Barnes and Noble is considering further reducing the price of its e-book readers."CONSIDERING" IS DIFFERENT FROM "IMPLEMENTING". ONLY IF THEY SAY THEY ARE " IMPLEMENTING" WILL THIS LOGIC HOLD TRUE......PEOPLE CONSIDER SO MANY THINGS?????
Re: Online retail giant Amazon.com has joined the price war of   [#permalink] 18 Jan 2014, 22:19
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