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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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26 Jun 2010, 21:26
31
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95% (hard)

Question Stats:

44% (02:12) correct 56% (02:15) wrong based on 2077 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.
[Reveal] Spoiler: OA

Last edited by Mahmud6 on 14 Sep 2017, 05:12, 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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27 Jun 2010, 00:32
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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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27 Jun 2010, 01:46
Totally agree!
4) and 5) are possible. In fact I would have marked D as the answer if this was an Paradox question. D is a logical conclusion why the "market sales volume" of FCC remained at a high level, yet the market share went down to 4%.

Premise : 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.

5) is possible since the market share was poached from the "Friendly Computer Stores" so it went down to 4%

(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.

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

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27 Jun 2010, 12:35
This is a Princeton Review question. I have yet to see what expl they have given for the same. i had chosen D as the answer, having misread the question as a paradox ques. When I saw the answer, I was trying to find a logic for D as the answer.

The argument says that Regulation X had no effect on the sales figure but decreased the market share to 4%. Hence, Regulation caused decrease in market share.
D says that other market forces (assuming not the regulation) caused the decrease in the market share. Hence an alternate expl which would weaken the conclusion. If a choice weakens a concl, it cannot be true. The only puzzle here is that I cannot justify or explain the first part of choice D.

Would really welcome more comments and in the meantime find out the official expl as well.

Thanks

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

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27 Jun 2010, 12:52
I chose A as well and am shocked with the OA. If all the chains experienceed a drop in sales volume post X while FCS kept its sales volume intact FCS' market share could not have declined... not sure how D is possible....

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

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27 Jun 2010, 21:49
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shocked because of the OA too, the new sales volume must increase

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

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28 Jun 2010, 03:57
IMO A

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

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28 Jun 2010, 08:01
Marked A as well.

is there any OE for choice D?

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

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28 Jun 2010, 09:08

After enactment of law X - Friendly computer stores shares dropped to 4% while sales volume is constant. This is possible if and only if sales of atleast some of the computer retailers has increased.

A is the choice at other GMAT forums as well. Hence I believe OA should be wrong.

check this out -
http://www.beatthegmat.com/inference-pr ... 60225.html

Thank You.

Thanks,
Akhil M.Parekh

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

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30 Jun 2010, 17:53
i dont believe the OA.

A for me.

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

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08 Jul 2010, 23:12
I per me answer should be A
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Re: Over an eleven-month period, during which national retail co [#permalink]

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08 Aug 2010, 21:21
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Why are the OAs posted so wrong? I found several CRs posted here with the wrong OAs. It makes me wonder if one should only look at questions from official sources.

Now one thing about choice A is that it refers to "4 months" whereas the passage says "ensuing months". Perhaps the sales volume for others increased but it was after the 4 months. In which case D would make sense as if nothing else changed and the regulation was enacted on ALL then something must have been unfavorable to the particular company in question to reduce the market share?

What do you think?
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Re: Over an eleven-month period, during which national retail co [#permalink]

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13 Sep 2010, 02:01
mainhoon wrote:
Why are the OAs posted so wrong? I found several CRs posted here with the wrong OAs. It makes me wonder if one should only look at questions from official sources.

Now one thing about choice A is that it refers to "4 months" whereas the passage says "ensuing months". Perhaps the sales volume for others increased but it was after the 4 months. In which case D would make sense as if nothing else changed and the regulation was enacted on ALL then something must have been unfavorable to the particular company in question to reduce the market share?

What do you think?

I agree with you. Am tired of wrong OAs in CR. However, talking about D I believe it is the list of possible option and cannot be weighed in the "EXCEPT" option. It is very much possible that a some changes in the market forces affected only company FCS and not others. So A is the only option which seems possible
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Re: Over an eleven-month period, during which national retail co [#permalink]

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13 Sep 2010, 03:18
Hmm... after 3.5 mins ... I picked A... and guess what!

So in general, for these questions..do you guys read and make notes before reading the options? What is the general attack pattern for lengthy questions?

Let me atleast be enlightened on the technique using this problem.

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

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14 Sep 2010, 06:01
i think A

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

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24 Mar 2015, 22:08
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Re: Over an eleven-month period, during which national retail co [#permalink]

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12 May 2015, 01:18
Is it A or D.
To me A makes sense...but if applying elimination strategy we have two choices C & D which are opposite to each other so one of them needs to be correct.
Although I picked C,,but option D explanation fails to convince me.

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

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12 May 2015, 10:58
Hi Experts,
Thanks
Celestial

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

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29 Jan 2016, 20:10
gmatprep09 wrote:
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.

D is correct. It shows us another reason for the drop of share of Friendly company without the influence from enaction of goverment.

A makes us confused. A only strengthens the argument. It assert that the decrease of Friendly's share is also caused by goverment action and others also do.

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

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31 Jan 2016, 05:14
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Hey Guys
Let me try to explain here:
There is a gap between "ensuing month" in the argument and following 4 month in the answer.
ensuing month can be 1, or 2, or 3 month and even more.
So, Friendly computer didn't fall to 4% until fifth month and all computer retailers experience a sales drop in the following 4 month.

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Re: Over an eleven-month period, during which national retail co   [#permalink] 31 Jan 2016, 05:14

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