Paper & Print is a chain of British stores selling magazines, books, a

Question

Paper&Print is a chain of British stores selling magazines, books, and stationery products. In Britain, magazines' retail prices are set by publishers, and the retailer's share of a magazine's retail price is 25 percent. Since Paper&Print's margin on books and stationery products is much higher, the chain's management plans to devote more of its stores' shelf space to books and stationery products and reduce the number of magazine titles that its stores carry.

Which of the following, if true, most strongly argues that the plan, if put into effect, will  not  increase Paper&Print's profits?

(A) Recently magazine publishers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the largest circulation magazines.

(B) In market research surveys, few consumers identify Paper&Print as a book or stationery store but many recognize and value the broad range of magazines it carries.

(C) The publisher's share of a magazine's retail price is 50 percent, and the publisher also retains all of the magazine's advertising revenue.

(D) Consumers who subscribe to a magazine generally pay less per issue than they would if they bought the magazine through a retail outlet such as Paper&Print.

(E) Some of Paper& Print's locations are in small towns and represent the only retail outlet for books within the community.

GMATPrep Code  :  VCR004721

prasannar · Answer

B for me

Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Paper&Print's profits?

A: Recently magazine publishers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the largest circulation magazines. -> this will reduce the profits for all the retailers, and irrelevant for the given context

B: In market research surveys, few consumers identify Paper&Print as a book or stationery store but many recognize and value the broad range of magazines it carries.-> sounds good. More consumers identify and buy magazines from P&P than they buy books/stationery thus profits/margins would be less if magazines are reduced.

C: The publisher's share of a magazine's retail price is 50 percent, and the publisher also retains all of the magazine's advertising revenue.-> irrelevant

D: Consumers who subscribe to a magazine generally pay less per issue than they would if they bought the magazine through a retail outlet such as Paper&Print.-> irrelevant,eliminate it

E: Some of Paper& Print's locations are in small towns and represent the only retail outlet for books within the community. ->this strengthens the idea but "some" eliminates the choice

yavasani · Answer

What if they sell more magazines and less books and stationary products. B clearly raises this issue.

gmatbull · Answer

B is clearly the winner: if no one (or just a few) buys your merchandise, then you run at a loss- that's what B is saying.

OldFritz · Answer

Straight B.

Classic case of the greedy and imprudent farmer who dissected his golden goose in search of more gold from his "cash cow" (nice pun, eh?).

The retailer is making the mistake of shelving its flagship product (magazines) in favor of items (books and stationery) for which the retailer is less heralded. Not a smart move, Blighty--expect your bottomline to take a hit if you carry on, me matey.

Cheers,
Der alte Fritz.

Prashant1984 · Answer

Note that we can't rule out choices simply saying that they are irrelevant to the issue at hand. The reason is because all the answer choices will bring in a context that is outside the scope of the argument in case of Weaken/Strengthen/Paradox/Assumption/Evaluate question types.
Saying that an answer choice is simply irrelevant is very much misleading to people who chose the choice as incorrect answer.

Reason why (D) does not fit into the picture, because it's already accounted for in the argument. It doesn't weaken the argument's conclusion in nay way because we already know that A publisher selling the books or magazines via a retail chain, accounts for 75% of the Marked price of the magazines and the rest 25% goes to the retailer.
When a consumer subscribes a magazine, he/she directly buys the magazine from the publisher. So in that case naturally the consumers would pay less on marked price, rather when they purchase the same magazines from the retailer's chain store, where the publishers increase the Marked price to account for 25% of the retailer's share.

So this choice doesn't weaken the argument anyway.
A good way to master CR, is to know the reason why an answer choice is relevant to the argument and if not - why?

Thanks
Prashant

mbaiseasy · Answer

Plan to increase profits: Devote more shelf to books and stationery ; Remove magazines

(A) Recently magazine publishers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the largest circulation magazines.
  Magazines have gone cheaper = means less revenue for the store. We are looking for a WEAKENER of the plan.

(B) In market research surveys, few consumers identify Paper&Print as a book or stationery store but many recognize and value the broad range of magazines it carries.
  Trademark of the store is the magazines... This made them pretty known... This is WEAKENING the plan...

(C) The publisher's share of a magazine's retail price is 50 percent, and the publisher also retains all of the magazine's advertising revenue.
  the store gets 25% that's all that matters... this is neutral...

(D) Consumers who subscribe to a magazine generally pay less per issue than they would if they bought the magazine through a retail outlet such as Paper&Print.
  Cheaper at Paper&Print = means the plan is a good thing = NOT A WEAKENER...

(E) Some of Paper& Print's locations are in small towns and represent the only retail outlet for books within the community. 
  Known for books = STRENGTHENS the PLAN

Answer: B

NR91 · Answer

B should be the answer because if the store has magazine centric store, then number of people visiting the store for magazines would be lot more higher; lower number of magazines would reduce those revenues.

semwal · Answer

CLEAR "B".....

(B) In market research surveys, few consumers identify Paper&Print as a book or stationery store but many recognize and value the broad range of magazines it carries.

IF CONSUMERS DON'T SEE PAPER AND PRINT AS A BOOK STORE, BY STUFFING MORE BOOKS --SALE AND HENCE PROFIT WONT INCREASE....
INSTEAD MORE MAGAZINES WILL ENSURE MORE CIRCULATION/SALE AND MORE PROFIT.... .

shuvabrata88 · Answer

IMO (B) which shows that the plan might hurt its own reputation and hence profits.
(A)&(C) talks about publisher.
(D) talks about consumer benefits.
(E) slightly strengthens the argument.

kelvind13 · Answer

Sounds like the Answer should be 'B'

Even though they get a small margin per magazine, if they are known as a magazine destination. They could be making more profits if they sell larger volumes of magazines than if they sell a few books with a high margin.

Please correct me if I'm wrong.

Nevernevergiveup · Answer

A is out of scope since it is a general stmt and does not refer to P & P.
B does explain why the plan does not work. Even if they increase books customers will mostly ask fr magazines only so it would only hurt.
C. This does nt reflect why plan does not work.
D. supports the plan if nt weaken. Reverse.
E. some indicates that it need not be much considered. out

Ans B

BottomJee · Answer

OFFICIAL EXPLANATION

Reasoning-   What would make it least likely that devoting more of the business to books and stationery, and less to magazines, would increase profits?  The reasoning behind the plan is that Paper&Print has a greater profit margin on books and stationery than it can legally attain on magazines, and that carrying more items with higher profit margins and fewer with lower profit margins will increase overall profits. A weakness in this reasoning is that profits depend on actually selling items, not merely on carrying them. If magazines sell far more briskly than other merchandise, shelf space devoted to magazines may generate higher profits, despite the magazines’ lower profit margins. If this were the situation, the plan might backfire and fail to increase profits.

A. Lower retail prices on magazines could lower Paper&Print’s profits per magazine sold and hence make the plan to devote more shelf space to merchandise other than magazines more likely to increase overall profits.
B.  Correct.  If far more customers shop at Paper&Print for its broad range of magazines than for its books and stationery, then cutting the shelf space devoted to magazines may disappoint the customers, reducing overall sales and profits.
C. Paper&Print’s magazine profits come from the 25 percent of the magazines’ retail price that goes to the retailer, no matter who gets the rest.
D. This would tend to reduce Paper&Print’s magazine sales and hence make the plan to devote more shelf space to merchandise other than magazines more likely to increase overall profits.
E. This would tend to increase Paper&Print’s book sales at some stores and hence make the plan to devote more shelf space to books rather than magazines more likely to increase overall profits.

The correct answer is B.

VerbalBot · Answer

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Paper & Print is a chain of British stores selling magazines, books, a

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