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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 17 Feb 2018, 21:19
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





Hello Egmat

What if we assume market demand as 200
Last two year yield as 250
current year yield as 50.

Then as per the math we did above, farmers don't need to save any crop at all to meet the demand of the market.
Please explain where am I wrong?
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 19 Feb 2018, 04:16
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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 record breaking 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


Argument:
Farmers get high price if pecans are scarce and low price if they are abundant.
So in high yield years, farmers hold back and refrigerate some crop (create artificial rarity) for 1-2 yrs. So they sell this crop in the next 1-2 years hoping for better price.
This year the crop was smallest in 5 years but farmers may still store away some for next 1-2 years.

Why?

Here is what comes to mind: Smallest in 5 years does not mean small. What if in the last 4 years, there was bumper crop? It could still be average or above average this year. Also, what if because of bumper crop of last 1-2 years, there is a lot refrigerated and needs to be sold this year? The argument says that it is held back for 1-2 years. So the last 2 years crop would need to be sold now. The current fresh crop can be partially sold and partially refrigerated for future. This is what option (A) says and is correct.

(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 the argument.

(C) pecan prices have not been subject to sharp fluctuations in recent years
Sharp fluctuations may not have been there but farmers could still "hope for better prices"

(D) for some pecan growers, this year's crop was no smaller than last year's
We are talking about the total yield. For some farmers it may have been the same, for some even more than last year but overall it is smallest in last 5 years.

(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
It doesn't help resolve why this year it may be held back.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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adkikani wrote:
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
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.

adkikani, I thought your analysis of the argument was great, and I'm glad to see that you are using POE!

We know that "pecan growers get a high price for their crop when pecans are comparatively scarce." As a result, "in high-yield years, growers often hold back part of their crop in refrigerated warehouses for one or two years." That way, when pecans are comparatively scarce, they can pull those pecans out of storage and sell them at a higher price.

So when we have a low-yield year, we wouldn't expect the farmers to hold back pecans. This makes us inclined to eliminate (A).

But what if we have a low-yield year AFTER having two record-breaking years? During the two record-breaking years, the farmers would have put a lot of pecans in storage. This year, yields are low, so we can take those pecans OUT of storage and sell them. If the farmers sell all of the stored pecans AND all of the pecans from this years' crop, they might flood the market with pecans and actually drive prices down, despite this year's low yield.

So what do they do? They sell the stored pecans and hold some of this year's pecans back. That way, they avoid a market oversupply and still have some pecans in storage for next year in case yields are low again.

At first glance, (A) doesn't seem relevant. But if you think about the situation, (A) would indeed resolve the mystery.
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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 2018, 17:48
I originally chose A because in my passage notes, I had written that a possible answer should point to "abundant crops within 2 years". What threw me off about choice A was the word "record-breaking". I felt it was too strong of a description for the answer to be right.
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 28 Feb 2018, 05:05
hdavies wrote:
I originally chose A because in my passage notes, I had written that a possible answer should point to "abundant crops within 2 years". What threw me off about choice A was the word "record-breaking". I felt it was too strong of a description for the answer to be right.


I often come across this point of view - "an option is too strong/extreme and hence must be incorrect". But this is not right.

What do you mean by too strong? The argument could very well warrant strong language.

Here, more the production in the last two years, better the argument. So "record-breaking" is actually re-assuring. If more is leftover from last two years, we will need to hold back more of this year's 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 24 Mar 2018, 06:45
I still haven't seen a compelling reason as to why D is wrong

If total yield this year is 100, and 30% of the farmers store some pecans, then the supply of pecans will be less
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 29 Mar 2018, 04:36
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 record breaking 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


(A) each of the last two years produced record breaking 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

B, D, E are Irrelevant here. Only A and C are looking good. I choose A over C

Hence (A)
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Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 08 Apr 2018, 05:42
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here is my understanding
argument is about demand -supply-price

1.scarce in amount-> high price
2.abundant->low price
plan:hold back a part of yield to meet just the demand,avoiding oversupply and get high price after 1-2 years

this year:yield is smallest among last 5 years
but it does not mean there is a low yield.the amount produced can be high enough to cause an oversupply.Hence hold back some part of yield

now option A tells that in last 2 years production was record-breaking
so it may be possible that there is not yet enough demand to meet the supply.so hold back this year's production
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 05 May 2018, 05:09
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 record breaking 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


(B), (C) and (E) can be easily eliminated as the points they talk about are out of scope of stimulus.

The choice is between (A) and (D).

The word "some" in (D) doesn't align with stimulus. The stimulus doesn't give any information if some or all growers hold back the crop and if "some" growers have a bumper crop then in that case other growers with smallest crop will hold the crop. We can eliminate (D).

Correct ans: (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 17 May 2018, 06:33
hi, anyone can help explain what E says?
I think the subject of E is the practice, the verb is had not yet become widespread.
IMO, practice means the action of store pecan. so Does E say that the action of store had not been well known?
i Dont understand "the last time the pecan crop was as small as it was this year."
The first part of E states the action had not been wel known, the second states the previous yield was same as this year yield
Its strange,
it is hard for me to understand E

Please clarify

Thanks in advance
Have a nice day
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 17 May 2018, 10:07
zoezhuyan wrote:
hi, anyone can help explain what E says?
I think the subject of E is the practice, the verb is had not yet become widespread.
IMO, practice means the action of store pecan. so Does E say that the action of store had not been well known?
i Dont understand "the last time the pecan crop was as small as it was this year."
The first part of E states the action had not been wel known, the second states the previous yield was same as this year yield
Its strange,
it is hard for me to understand E

Please clarify

Thanks in advance
Have a nice day
>_~


Hey zoezhuyan ,

I will try to explain you E in simpler terms.

Let's say this year(2018) crop was the lowest and the last time it was lowest was in 2010. Now, E is saying in 2010, we never used to hold back any crop across as much as as we are holding the crop this year.

Does that make sense?
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Re: Pecan growers get a high price for their crop when pecans are [#permalink]

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New post 17 May 2018, 21:21
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 _____________ .

Category: Logical completion

Known Information:
Farmers usually hold back certain portion of the crop in warehouse for one or two years.
This years crop was the smallest in five years.

Analysis:
The question we need to ask is why does the farmer's hold back certain part of the crop. The main reason is farmers are saving the crop for the rainy day, so when the yield is low they can get higher price. Now lets see the answer choices.

(A) each of the last two years produced record breaking pecan yields - This matches with our line of thought.

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

(C) pecan prices have not been subject to sharp fluctuations in recent years - Irrelevant to our question here

(D) for some pecan growers, this year's crop was no smaller than last year's - This does not give us information about why farmers chose to hold back some part of crop.

(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 - Same reason as option 4

Ans: 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 17 May 2018, 22:18
abhimahna wrote:
zoezhuyan wrote:
hi, anyone can help explain what E says?
I think the subject of E is the practice, the verb is had not yet become widespread.
IMO, practice means the action of store pecan. so Does E say that the action of store had not been well known?
i Dont understand "the last time the pecan crop was as small as it was this year."
The first part of E states the action had not been wel known, the second states the previous yield was same as this year yield
Its strange,
it is hard for me to understand E

Please clarify

Thanks in advance
Have a nice day
>_~


Hey zoezhuyan ,

I will try to explain you E in simpler terms.

Let's say this year(2018) crop was the lowest and the last time it was lowest was in 2010. Now, E is saying in 2010, we never used to hold back any crop across as much as as we are holding the crop this year.

Does that make sense?


thanks su much
abhimahna
it's helpful, and i am worried further about my reading skill, LOL

I read a lot of your posts, i appreciate them

Have a nice day
>_~
Re: Pecan growers get a high price for their crop when pecans are   [#permalink] 17 May 2018, 22:18

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