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Pecan growers get a high price for their crop when pecans are

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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 20 Oct 2012, 07:59
ChrisLele wrote:
I received a PM on this one. I'll do my best to dispel any confusion :).

The way I see it there is a paradox going on here. Compared to high yield seasons, in which farmers store pecans to keep the price down, low yield seasons would not lead to storage. Thus, we need an answer that resolves this paradox. First off, notice the wording, "was the smallest in five years." That is not the same as a low yield year if the preceding harvests were high yield. This year simply wasn't as high.

The correct answer, answer (A), describes exactly such a scenario: record breaking yields in the previous two years. Therefore, this year can also be a high yield season and farmers are doing as they usually would, i.e., holding back part of their crop.


Why is D wrong. Even if some farmer, say 1 farmer holds backs some crop it is still a portion, howsoever small.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 08 Dec 2012, 00:43
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Argument

Let us analyse 'Logic Flow' :

Premise 1: Pecan Volume increases ==> Price decreases [negative correlation]
Premise 2: High Volume of Pecan ==> Tendency to store for future selling (when price will be high) [Causal Relation]
Conclusion: This year, there was lowest addition in Volume of Pecan ==> Tendency to store still valid for this year.


Hmm... note :idea: the 'flawed Logic leap' existing between Premise 2 and Conclusion.
Logically, Volume =/= (is not equal to) Addition in Volume
But the 'flawed Logic leap' has assumed that Existing Volume of Pecans (from Premise 2) is same as Addition in Existing Volume of Pecan (as in Conclusion)


Now let us search for the options

A) Each of the last two years produced record breaking pecan yields
It says that the Volume of Pecan available is huge. So using Premise 2, the tendency to store will still persist.

B) The Quality of this year's pecan crop is no more worse than the quality of the pecan crops of the previous five years.
At the most, this information can say that OK, we have good quality crop this year. But, quality cannot decide selling pattern. (it will be far-fetched if we try to establish a relation between quality and selling) :geek:

C) pecan prices have not been subject to sharp fluctuation in recent years.
So, if prices help us decide whether to store or sell, the 'stable price' pattern just tells us- do as you have been doing recently. (Also, the option provides no info regarding Existing Volume of Pecan which is used to make 'selling/storing' decisions)

D) For some pecan growers , this year's crop was no smaller than last year's.
Those SOME people are not the representative of the whole lot of farmers. Immediately eliminate such options. :2gunfire:

E) the practice of holding back part one year's crop had not yet become widespread the last time the pecan crop was as small as it was this year.
Still no info regarding Existing Volume of Pecans. How can I decide- either to sell or store. This option is useless for me. :(

That is how, the OA is A

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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 10 Jul 2013, 05:01
I am not convinced with A
because it is stated in the argument when the produce is abundant then the crops are held back , Ans choice A says that there were abundant production in the last wo years this implies that the pecans must have been hoarded and now this year when the produce is smallest prices will rise automatically and the produce which was held back would be sold along with this years produce...
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 10 Jul 2013, 08:57
Hi ruchikaarya41

Key in CR is LOGIC. So think if you were a producer what would you logically do?

Because so much is 'hoarded' in the warehouses from last years, that crop will enter the market driving the price down.

So as a producer, you may wait until next year to sell this years crop, as the price this year will still be quite low.

Clear?

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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 22 Nov 2013, 19:49
betterscore wrote:
Which of the following most logically completes the
passage?

Pecan growers get a high price for their crop when
pecans are comparatively scarce, but the price drops
sharply when pecans are abundant. Thus, in high-yield
years, growers often hold back part of their crop in
refrigerated warehouses for one or two years, hoping
for higher prices in the future. This year's pecan crop
was the smallest in five years. It is nonetheless quite
possible that a portion of this year's crop will be held
back, since _____________ .

(A) each of the last two years produced recordbreaking
pecan yields

(B) the quality of this year's pecan crop is no worse
than the quality of the pecan crops of the
previous five years

(C) pecan prices have not been subject to sharp
fluctuations in recent years

(D) for some pecan growers, this year's crop was
no smaller than last year's

(E) the practice of holding back part of one year's
crop had not yet become widespread the last
time the pecan crop was as small as it was this
year


Is it not contradictory that the Pecan crops are smallest this year and the Option A tells that - each of the last two years produced record breaking pecan yields. How is it possible ??

Can anyone clarify…….??

Why not to choose answer C . smallest crop - stored crops will be released into market - no price fluctuations in past five years ©- since the guarantee of receiving the same price in coming years pecan growers will store the crop.


:banana
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 23 Nov 2013, 01:33
Hi,

Consider this for the past two years the crops were in abundance so i bought a whole lot of them at price .75x (Now i have abundant supply from the past two years). This year the crops price is 1.25x, but i have old supply with me at .75x, so now i would like to sell that old supply of two years 1.25x and buy some fresh one at 1.25x. I would still make profit and rotate the inventory.

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Ramandeep
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 23 Nov 2013, 13:05
Any tips on mastering this complete the passage category CR questions.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 23 Nov 2013, 17:43
taleesh wrote:
Any tips on mastering this complete the passage category CR questions.


read MGMAT / Veritas prep cr guides

hope that helps
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 24 Nov 2013, 09:45
hey have done MGMAT but I havnt got any command over it.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 24 Nov 2013, 16:54
taleesh wrote:
hey have done MGMAT but I havnt got any command over it.

I also read it once; but need revision with cross defence from OG. Try it will help.
:banana
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 26 Feb 2014, 01:30
Hi E-GMAT,

Could you please explain the correct answer?

My analysis is as follows , 1. Price falls down as the crop's yield is in abandance or vice versa.
2.growers often hold back part of their crop in refrigerated warehouses for one or two years, hoping for higher prices in the future
3. This year the crop yield is smallest.

So based on the above 3 premise my query is How come the reason for them to hold back this year crop yield is related to the last 2 year yield.As i suppose,once this year yield is smallest then growers should sells instead of holding back as i assume that this year the price will shoots up and even if the last 2 year yields were recordbreaking,they would be selling even previous stored pecans.

Could you please clarify what i'm missing?

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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 27 Feb 2014, 05:13
A it is. No other answer even comes close. A logical conclusion should explain why a portion of current year's crop will be stored. And A explains it best. If there was record breaking pecan yield last two years, then price would have been very low and those years pecans were stored. Note that the argument mentions pecans are stored for one or two years in refrigerated warehouses in hopes of higher price. If this year had smallest yield, then prices are high and pecan growers will reach for warehouses to sell older yield for profits first. This leaves a possibility of current yield to be stored.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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Nitinaka19 wrote:
Hi E-GMAT,

Could you please explain the correct answer?

My analysis is as follows , 1. Price falls down as the crop's yield is in abandance or vice versa.
2.growers often hold back part of their crop in refrigerated warehouses for one or two years, hoping for higher prices in the future
3. This year the crop yield is smallest.

So based on the above 3 premise my query is How come the reason for them to hold back this year crop yield is related to the last 2 year yield.As i suppose,once this year yield is smallest then growers should sells instead of holding back as i assume that this year the price will shoots up and even if the last 2 year yields were recordbreaking,they would be selling even previous stored pecans.

Could you please clarify what i'm missing?

Thanks


Hi Nitinaka19,

Let me use some numbers here:

Let's suppose that the market demand is 100 units. So, if you sell more than 100 units, the price falls (as the argument says).

Suppose last year, the farmers/growers produced 150 units of pecans. Now, this means that probably, they would not have sold 50 units last year.

Since this year, the produce was very low. Let's say it is 60 units.

Now, my question is: how many units of pecans do farmers have for selling this year? Is it 60 or 110?

If it is 110 units, would farmers want to hold back some of the produce this year too, given above explanation?

Let me know your thoughts.

Thanks,
Chiranjeev
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 04 Mar 2014, 21:02
Hi Chiranjeev,

My answer is If the market demands remains 150unit for this year and the farmer produce 60 units this year.As in total he has 110units and assuming the price will go up. He should sell all(110unit).

My thought process is after a abundant production in last 2 years. The price was came so low that now farmer want the price to go higher. So keeping the price constraint in mind.The farmer will hold some of the production.

Please correct me if I'm wrong?

Thanks
Nitin
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 04 Mar 2014, 21:25
Nitinaka19 wrote:
Hi Chiranjeev,

My answer is If the market demands remains 150unit for this year and the farmer produce 60 units this year.As in total he has 110units and assuming the price will go up. He should sell all(110unit).

My thought process is after a abundant production in last 2 years. The price was came so low that now farmer want the price to go higher. So keeping the price constraint in mind.The farmer will hold some of the production.

Please correct me if I'm wrong?

Thanks
Nitin


Hi Nitin,

In our example, the demand was 100 units, not 150 units.

Think about it again.

Thanks,
Chiranjeev
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 04 Mar 2014, 22:03
Hi,

LOL..!!! Seriously i need a REDBULL.!!! i got my answer .

Thanks Chiranjeev .
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 02 Jan 2015, 05:55
C is not the right choice .
It talks about past scenario.
However, Future cannot be predicted.Next year pecan yield may also be very small and pecan prices may increase sharply making profit to the growers , provided the growers store pecan this year.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 24 Feb 2017, 09:34
egmat wrote:
Nitinaka19 wrote:
Hi E-GMAT,

Could you please explain the correct answer?

My analysis is as follows , 1. Price falls down as the crop's yield is in abandance or vice versa.
2.growers often hold back part of their crop in refrigerated warehouses for one or two years, hoping for higher prices in the future
3. This year the crop yield is smallest.

So based on the above 3 premise my query is How come the reason for them to hold back this year crop yield is related to the last 2 year yield.As i suppose,once this year yield is smallest then growers should sells instead of holding back as i assume that this year the price will shoots up and even if the last 2 year yields were recordbreaking,they would be selling even previous stored pecans.

Could you please clarify what i'm missing?

Thanks


Hi Nitinaka19,

Let me use some numbers here:

Let's suppose that the market demand is 100 units. So, if you sell more than 100 units, the price falls (as the argument says).

Suppose last year, the farmers/growers produced 150 units of pecans. Now, this means that probably, they would not have sold 50 units last year.

Since this year, the produce was very low. Let's say it is 60 units.

Now, my question is: how many units of pecans do farmers have for selling this year? Is it 60 or 110?

If it is 110 units, would farmers want to hold back some of the produce this year too, given above explanation?

Let me know your thoughts.

Thanks,
Chiranjeev



60->Because profit matters.
if it is 110 and farmers want to hold back some then the amount that would be held back needs to be 10 or more depending on how much profit farmers want to make.
Thus the decision is at farmer's discretion and not bound by some hard logic. If 10 or more are held back, they might as well hold back a much larger proportion than that making 60 a fair contender.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 10 Oct 2017, 21:57
This is a find the assumption question in disguise. Knowing this, which of the answer choices is necessary for the author's argument to hold.
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Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 16 Feb 2018, 06:53
Hi GMATNinja VeritasPrepKarishma GMATNinjaTwo

I am stumped by the answer choices and was not able to perform PoE correctly.

My understanding of argument:

Quote:
Pecan growers get a high price for their crop when pecans are comparatively scarce, but the price drops sharply when pecans are abundant.


A particular food grain farmers get high price when these grains are less in supply than demand. Obviously prices rises up to meet demand and vice versa.

Quote:
Thus, in high-yield years, growers often hold back part of their crop in refrigerated warehouses for one or two years, hoping for higher prices in the future.


When the food grains are cultivated in abundance, the farmers store some of them in cold storage for x duration so that they can sell them when prices are high.
Quote:
This year's pecan crop was the smallest in five years. It is nonetheless quite possible that a portion of this year's crop will be held back, since


What happened this year was: The yield was smallest in last five years, So I pause and think: Definitely storage is not possible due to lower yields.

The word - nonetheless - shows that I will be presented with a contrast. The contrast is that : farmers decide to NOT sell all of the food grains. This is surprising to me as well since if lower yields are there in current year, why would they not sell all it it? Ideally they should be getting higher price this year and not store / held back food grains.
The correct answer choice will resolve this mystery.

PoE:


Quote:
(A) each of the last two years produced record breaking pecan yields

So what? In current time, why do farmers need to store food grains in cold storage.
This option says that this year and last year each produced much more food grains
than ever produced in history. But how does this explain the farmers may want to SELL food grains
and STORE it?

Quote:
(B) the quality of this year's pecan crop is no worse than the quality of the pecan crops of the previous five years


Quality is irrelevant to argument

Quote:
(C) pecan prices have not been subject to sharp fluctuations in recent years

Seems close, if fluctuations itself are not guaranteed , the action of farmers to store shall be not be a reliable one

Quote:
(D) for some pecan growers, this year's crop was no smaller than last year's

This increases the mystery further
Quote:
(E) the practice of holding back part of one year's crop had not yet become widespread the last time the pecan crop was as small as it was this year

I am not sure if widespread of a particular practice is relevant. But note the later part of choice: since this year also my yield was as low as last year the mystery gets deepened instead of resolving.
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