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Over an eleven-month period, during which national retail co

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Over an eleven-month period, during which national retail co  [#permalink]

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Updated on: 14 Sep 2017, 04:12
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Difficulty:

95% (hard)

Question Stats:

44% (02:39) correct 56% (02:41) wrong based on 2357 sessions

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CAn someone explain the appraoch to tackle this question? Thanks.

Over an eleven-month period, during which national retail computer sales remained stable at 400,000 units per month, sales by the Friendly Computer Stores chain rose 200 percent, increasing the chain’s share of the total market to 7 percent. Other retail stores tried, without success, to attract customers away from the Friendly chain. Then regulation X was imposed on all computer retailers by the federal government. In the ensuing months, Friendly’s total share of the market fell to 4 percent, even though its monthly sales volume remained at the same level it had reached just prior to the enactment of regulation X.

Each of the following, in conjunction with the information presented above, could be true EXCEPT:

(1) All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X.

(2) All other computer companies lost some market share during the four-month period prior to the enactment of regulation X.

(3) The enactment of regulation X provided the Friendly chain’s competitors with an advantage they did not previously have.

(4) The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share.

(5) In the period following the enactment of regulation X, many new computer retailers that specialized in low-budget computers entered the marketplace.

Originally posted by gmatprep09 on 26 Jun 2010, 20:26.
Last edited by Mahmud6 on 14 Sep 2017, 04:12, edited 2 times in total.
corrected the OA
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Re: Over an eleven-month period, during which national retail co  [#permalink]

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26 Jun 2010, 23:32
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2
11 month period. National sales is 400,000 units per month.
For the FCS chain, sales rose 200%, increasing its market share to 7%.

After regulation X:
FCS market share down to 4% BUT monthly sales volume remained the same as it was at the end of the 11 month period.

Which of the following CANNOT be true?

A. This cannot be true. Consider this: At the end of 11 month period, FCS had sales of 700, which was 7% of the entire market sales of 10,000. In ensuing months, FCS still sold 700, but this represents only 4% of the new market (=17,500), which must have obviously increased. If all other retailers experienced a DROP in the sales, how can the market increase, and thus the same amount of sales of FCS account for a lesser percentage of the market?!

I disagree with the OA, and am almost certain this is the answer.

B. This could be true, this is the 4 month period before regulation X, so there could have been fluctuations in that time, since we only know the net results of that 11 month period.

C. This could be true, and explains why the the other retailers experienced an increase in sales, and thus increasing the market relative to FCS's constant sales.

D. Other market force changes caused the market share decline - not some advantage that other people had over FCS. This is perfectly possible. What if regulation X caused some other changes in the market that explains FCS's constant sales but reduced market share? What if regulation X has nothing to do with what happened - perhaps some other event caused it.

E. This is perfectly possible and actually explains the increase in the market.

Pick A.

Please give Source and Original explanation if possible.
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Re: Over an eleven-month period, during which national retail co  [#permalink]

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24 Sep 2016, 10:43
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Re: Over an eleven-month period, during which national retail co  [#permalink]

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22 Oct 2016, 13:24
abhimahna wrote:

Since the no. of months is not determined by the phrase "ensuing months", option A is possible if the "ensuing months" is not equal to 4 months.

Nonetheless, D may also be true - implementation of X may just be coincidental and not causal. It is possible that some other regulation Y was implemented and that caused this change in market scenario.

So, in my view all options could be true.
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Re: Over an eleven-month period, during which national retail co  [#permalink]

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31 Jan 2017, 01:51
As others have pointed out, the answer is listed as A in other forums, and A is the only logical answer. If Friendly's sales are the same but its market share is down, then some of its competitors must have seen an increase in market share. Even if new vendors entered the market, they would still have to see an increase in market share (from zero to positive!) in order to impact Friendly's market share. A cannot possibly be true given the initial information, so it has to be the answer.

(I should add that this is clearly copied from an official LSAT question--PT 31-2-15, for anyone who wants to look it up. In that question, A is the answer for exactly the same reason, so it's pretty clear that A is the intended answer. The original post here should be corrected.)
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Re: Over an eleven-month period, during which national retail co  [#permalink]

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31 Jan 2017, 01:55
wayne7teng, I see no reason to say that if A were false, B and E would also have to be false. B talks about the period before the regulation, when Friendly was on the rise. Nothing that happens later can invalidate this choice on its own. As for E, it's perfectly compatible with A being false. The entry of a new vendor does not necessitate a drop in *sales volume* on the part of other vendors.
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Re: Over an eleven-month period, during which national retail co  [#permalink]

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28 Feb 2017, 11:12
gmatprep09 wrote:
Over an eleven-month period, during which national retail computer sales remained stable at 400,000 units per month, sales by the Friendly Computer Stores chain rose 200 percent, increasing the chain’s share of the total market to 7 percent. Other retail stores tried, without success, to attract customers away from the Friendly chain. Then regulation X was imposed on all computer retailers by the federal government. In the ensuing months, Friendly’s total share of the market fell to 4 percent, even though its monthly sales volume remained at the same level it had reached just prior to the enactment of regulation X.

Each of the following, in conjunction with the information presented above, could be true EXCEPT:

(1) All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X.

(2) All other computer companies lost some market share during the four-month period prior to the enactment of regulation X.

(3) The enactment of regulation X provided the Friendly chain’s competitors with an advantage they did not previously have.

(4) The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share.

(5) In the period following the enactment of regulation X, many new computer retailers that specialized in low-budget computers entered the marketplace.

I don't have the highest opinion of this question. Among other things, I don't know that I have ever seen an official question of a "could be true" variety. The GMAT CR definitely has "must be true" questions, but this is a looser and sloppier variation that the GMAT doesn't explore.

We know that, during the first eleven-month period before Regulation X, Friendly Computer Stores tripled its sales and shot up to 7% of the market space.
Then, Regulation X goes into effect. In the next moths, Friendly Computer Stores keeps its high levels of sales, but this same value now counts for a smaller percent. A percent is a part over whole ratio. If the part, FCS's sales, stays the same and the percent goes down, this means that the whole, the sales across the whole industry. It absolutely must be true that other computer companies had increased sales during the period following Regulation X.

(A) All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X.
This baldly contradicts what we know must be true. There is absolutely no way this statement could be true. This is a promising choice for the answer.

(B) All other computer companies lost some market share during the four-month period prior to the enactment of regulation X.
Certainly, if FCS gained market share, at least some other companies lost market share. Yes, it is at least conceivable that EACH and EVERY other company lost market share. That could in a magical special case world. This is part of what is sloppy about this entire format.

(C) The enactment of regulation X provided the Friendly chain’s competitors with an advantage they did not previously have.
This is certainly plausible, because it seems that the competitors increased their sales while FCS stayed flat.

(D) The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share.
This is tempting, though not in the way that good GMAT CR wrong answer would be a distractor. It's possible that general condition fostered by Regulation X favored wild grow in the market, and these conditions allowed all other companies to make headway, but that something unrelated to Regulation X (lawsuit, labor dispute, accident, etc.) hampered FCS, such that in these otherwise favorable general conditions, the best it could do was to tread water and maintain the level where they already were.

(E) In the period following the enactment of regulation X, many new computer retailers that specialized in low-budget computers entered the marketplace.
This certainly would explain the increase in the competitors and increase in size of the entire sector.

Choice (B), (C), (D), and (E) are choices that could be true, so these are wrong. (A) is the only one that is strictly impossible, so this is the correct answer.

Once again, I think the "could be true" question format is sloppy. The official questions are much more logically tight.

Here's a book review that may be germane:
Princeton Review GMAT Book Review: Cracking the GMAT 2017

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Re: Over an eleven-month period, during which national retail co  [#permalink]

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28 Feb 2017, 11:33
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mikemcgarry, I agree that this problem type isn't likely to show up on the GMAT, but there's nothing sloppy about the logic. The LSAT uses this format all the time, as in the problem this was copied from! "Could be true EXCEPT" just translates to "MUST BE FALSE," and as you've shown, only A must be false.

In any case, I couldn't find a GMAT question with this format, although I did find a discrepancy question that uses "could . . . EXCEPT": https://gmatclub.com/forum/the-tobacco- ... 12457.html
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Over an eleven-month period, during which national retail co  [#permalink]

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16 May 2018, 19:28
This is how I understand this question:

Premise: Chain's sales went up 200%. Chain's market share went up to 7%.
Issue: After the regulation, Chain's sales kept the same but market share went down to 4%.
Potential Explanation: The market size is larger. When numerator is the same and the denominator gets fatter, the result goes down.

Problem solving thoughts - Focus around the potential explanation. If an option's scenario is not a departure from that explanation, that option is ok.

A, Wrong. Two direction to explain. First, to make a market size larger, either there are new game players or the existing retailers have higher sales. If there are new game players, the new retailers definitely have sales increase (from 0 to whatever). So either case, sales of some retailers should go up. The question says "all other retailers...". It's clearly not right.

B, Be careful, this says "prior to the regulation". Prior to the regulation, Chain's sales went up. So if one entity gets more from the pie, there will be some other entities that get less. B makes sense.

C, Check what I put in A. If some existing retailers have higher sales, Chain's market share could go down. This option clearly provides a possible solution to the question. We can't just eliminate it.

D, Check what I put in A. This also could be true. When the increase of market size is due to the increase of the retailers, some existing retailers may not have any advantages (same sales as the sales prior to the regulation).

E, Exactly what I mention in A.
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Re: Over an eleven-month period, during which national retail co  [#permalink]

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10 Jul 2018, 04:58
It is simple.
The discrepancy is shown why the sales decreased JUST PRIOR to the enactment of the new legislation.

A talks about something that happened after enacting of the legislation.

So obviously A is out.
Re: Over an eleven-month period, during which national retail co &nbs [#permalink] 10 Jul 2018, 04:58
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