Over the past five years, the price gap between name-brand

Question

Over the past five years, the price gap between name-brand cereals and less expensive store-brand cereals has become so wide that consumers have been switching increasingly to store brands despite the name brands’ reputation for better quality. To attract these consumers back, several manufacturers of name-brand cereals plan to narrow the price gap between their cereals and store brands to less than what it was five years ago.

Which of the following, if true, most seriously calls into question the likelihood that the manufacturers’ plan will succeed in attracting back a large percentage of consumers who have switched to store brands?

(A) There is no significant difference among manufacturers of name-brand cereals in the prices they charge for their products.

(B) Consumers who have switched to store-brand cereals have generally been satisfied with the quality of those cereals.

(C) Many consumers would never think of switching to store-brand cereals because they believe the name brand cereals to be of better quality.

(D) Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals.

(E) Total annual sales of cereals—including both name-brand and store-brand cereals—have not increased significantly over the past five years.

Economist · Accepted Answer

yup B.
notice the phrases "to  narrow  the price gap" and "switching increasingly to store brands despite the name brands’ reputation  for better quality ".

This implies:
=> price difference will still be there and name brands' cereals will be 'slightly' costlier
=> the only and the most significant difference between the two types is quality.

Hence:
=>the only important factor to think about switching will be quality.

So, if customers are already satisfied with quality then there is no value-addition in switching to name brands.

shrutisingh · Answer

B looks like the ans.

Because if people are satisfied with the store-brand cereals then there is no reason for them to shift to other brands.Thus any efforts on the part of name-brand cereals manufacturers will go waste.

vannbj · Answer

Yeah. Only B makes sense. D is a boobie trap but it has no substance. It doesn't reduce the likelihood of people switching back but if they're satisfied and it's cheaper then why change back?

Jp27 · Answer

Over the past five years, the price gap between name-brand cereals and less expensive store-brand cereals has become so wide that consumers have been switching increasingly to store brands despite the name brands’ reputation for better quality. To attract these consumers back, several manufacturers of name-brand cereals plan to narrow the price gap between their cereals and store brands to less than what it was five years ago.

Which of the following, if true, most seriously calls into question the likelihood that the manufacturers’ plan will succeed in attracting back a large percentage of consumers who have switched to store brands?

(A) There is no significant difference among manufacturers of name-brand cereals in the prices they charge for their products.

(B) Consumers who have switched to store-brand cereals have generally been satisfied with the quality of those cereals.

(C) Many consumers would never think of switching to store-brand cereals because they believe the name brand cereals to be of better quality.

(D) Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals.

(E) Total annual sales of cereals—including both name-brand and store-brand cereals—have not increased significantly over the past five years.

SOURH7WK · Answer

CDE can be eliminated. None of these has anything to do with the conclusion/argument. Its between A & B.
IMO B. Only B gives us some reason to make the plan less successful. 
A seems to contradict with the First premise of the argument.

Hence B.

Archit143 · Answer

I think its straight B.
Nothing is said about the quality of store brand cereals in the argument. Hence its the spot where the option should strike so as to weaken.

tuanquang269 · Answer

I thought the correct choice is B, the consumers are too familiar with their consumption habits. So, changing habit is very challenges.

MacFauz · Answer

People were willing to pay a slightly higher price for name brand cereal because they thought that the store brand cereals were of poor quality. If they now feel that store brand cereals are of satisfactory quality, they might nit be willing to pay higher prices even if the difference is small.

Answer should be B

Kudos Please... If you liked my post.

Answer should be B

Kudos Please... If you liked my post.

kinjiGC · Answer

9. Over the past five years, the price gap between name-brand cereals and less expensive store-brand cereals has become so wide that consumers have been switching increasingly to store brands despite the name brands’ reputation for better quality. To attract these consumers back, several manufacturers of name-brand cereals plan to narrow the price gap between their cereals and store brands to less than what it was five years ago.

Which of the following, if true, most seriously calls into question the likelihood that the manufacturers’ plan will succeed in attracting back a large percentage of consumers who have switched to store brands?

A. There is no significant difference among manufacturers of name-brand cereals in the prices they charge for their products. -  OFS as we are not bothered about the prices charged among the name brand cereals.

B. Consumers who have switched to store-brand cereals have generally been satisfied with the quality of those cereals -  The customers are already satisfied with the quality of the cereals and they will not come back even if the difference of the price is narrowed - Correct

C. Many consumers would never think of switching to store-brand cereals because they believe the name brand cereals to be of better quality -  This is OFS as we are talking about other set of customers

D. Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals -  OFS

E. Total annual sales of cereals—including both name-brand and store-brand cereals—have not increased significantly over the past five years -  OFS we are not bothered about the sales

gvij2017 · Answer

Customer can switch back for two reasons- price and quality. 
Name brands are narrowing the price gap by reducing their prices with same quality. 
Now according to option D, store brand charge significantly lower price than that is charged by name brands. But if quality of store brand decreases drastically, then customer can switch to name brand. 
Now option B tell that customers are satisfied with quality of product. So the plan of reducing the prices of name brand product is not going to attract customer back. 
B is winning choice.

huongguyen · Answer

I don't understand why D is incorrect. As the stimulus said, I infer that consumers buy store-brand because it's cheaper than name-brand, not because of quality. 
So now, the name-brand believe that if they lower their price, they can recruit consumers to buy their products. To weaken this plan, D said: Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals 
=> which means, store-brand can lower their price more if they have a price competition with the name-brand.

Alisha2006 · Answer

Can't there be a difference between price set by manufacturer and price set by stores ?
If they are different, then price of store based cereals will sell at a significant lower price and hence, people would not be attracted to name brand and hence, weaken the conclusion.

I don't understand these set of answer choices which distorts the given premise.
Does this happens in GMAT?

CrackverbalGMAT · Answer

The argument says that

1) the price gap between name-brand cereals and less expensive store-brand cereals has become very wide
2) Because of this, consumers have been switching increasingly to store brands despite the name brands’ reputation for better quality.

To attract these consumers back,
The name brand manufacturers have decided to reduce the price of their cereals to less than what it was five years ago.

We need to find an option that would question/weaken the likelihood that the manufacturers’ plan will succeed in attracting back a large percentage of consumers who have switched to store brands

Option A - There is no significant difference among manufacturers of name-brand cereals in the prices they charge for their products. The comparison is not between the prices of name-brand cereals and store-brand cereals but among the manufacturers of name-brand cereals in the prices they charge for their products. This does not affect our conclusion and is incorrect.

Option B - Consumers who have switched to store-brand cereals have generally been satisfied with the quality of those cereals.
Even when the name-brand cereals had the reputation for better quality, consumers switched to store-brand cereals because of the huge difference in the price. Option B says that consumers who switched to store-brand cereals are satisfied with the quality of those cereals. This would make it all the more difficult for the name-brand manufacturers to bring back these consumers even with a reduction in price. This seriously weakens the manufacturers’ plan and is hence the correct answer.

Option C - Many consumers would never think of switching to store-brand cereals because they believe the name brand cereals to be of better quality
If many consumers still continue to use name brand cereals, there’s no need for the new plan at all. Option C does not affect the conclusion and is incorrect.

Option D - Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals- irrelevant to the plan discussed in the conclusion. Eliminate option D.

Option E - Total annual sales of cereals—including both name-brand and store-brand cereals—have not increased significantly over the past five years.
does not affect the manufacturers’ plan of reducing the price of their cereals- eliminate option E.

Vishnupriya
CrackVerbal Prep Team

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Over the past five years, the price gap between name-brand

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