GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 16 Jul 2018, 20:58

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Please review my AWA - GMAT date approaches..

Author Message
Intern
Joined: 06 Jan 2017
Posts: 10
Location: Italy
GMAT 1: 720 Q47 V41
GPA: 4

### Show Tags

31 Jul 2017, 14:56
Thanks in advance. Any suggestion is welcome!

The following appeared in the editorial section of a campus newspaper.
“Because occupancy rates for campus housing fell during the last academic year, so did housing revenues. To solve the problem, campus housing officials should reduce the number of available housing units, thereby increasing the occupancy rates. Also, to keep students from choosing to live off-campus, housing officials should lower the rents, thereby increasing demand.”
Discuss how well reasoned... etc.

The argument claims that, as a consequence of lower occupancy rates, housing revenues have fell during the last academic year, and campus housing officials should tackle this issue by reducing the number of available housing units and by lowering rents, thus increasing demand. The author fails to consider some facts that are crucial for the well reasoning of the argument, which is flawed and presents some major problems.

First, the author states that reducing the number of available housing units is an effective way of fighting the decline in housing revenues. The statement is a scratch and is not based on subjunctive evidence. The author implies a direct relationship between occupancy rate – a mere percentage – and housing revenues, without considering that the number of housing units and the rent amounts are the only factors influencing housing revenues. Occupancy rates are useful for campus housing officials to estimate if there are too many empty rooms, which may indicate that prices are too high or that the number of housing units compared to the number of campus students is exaggerated. The suggestion of the author of reducing the housing units may be effective in reducing costs such as maintenance cost or cleaning cost, but it could not influence revenues, so this statement is poorly reasoned.

Second, the author claims that lowering rents would increase demand for housing units, thus boosting revenues. Even though this statement is slightly more acceptable than the previous one, because generally lower prices could give rise to higher demand, it features a key weakness: there is no evidence whatsoever that students who choose to live off-campus only consider price as a factor. For instance, students may prefer living out of the campus to have a higher degree of independence or to be closer to their families. As a consequence, reducing the rents does not guarantee in any way that demand for housing units would rise.

Furthermore, another flaw in the statement above is that even if lower rents may cause higher demand, one could not know whether revenues would grow. To illustrate this, assume a 20% decrease on rents, attracting 30 students to live on campus. There is no evidence that revenues are higher, even though occupancy rates certainly is (from x to x + 30). Thus, this statement is not acceptable and the campus housing officials should not take it into account.

To sum up, the argument presents three big flaws that make it unconvincing. The author could have strengthened his claims by providing data showing a positive relationship between higher demand for housing units and revenues and by avoiding the already mentioned leap of faith and poor reasoning mistakes.
Director
Joined: 30 Jan 2016
Posts: 617
Location: United States (MA)

### Show Tags

04 Aug 2017, 06:30
Looks good -well-structured, easy to read and reasoned. Must be 6
_________________

Board of Directors
Joined: 01 Sep 2010
Posts: 3428

### Show Tags

04 Aug 2017, 07:11
Top Contributor
Akela wrote:
Looks good -well-structured, easy to read and reasoned. Must be 6

Yes, I agree. However, there some flaw in there.

2 paragraph

Quote:
Second, the author claims that lowering rents would increase demand for housing units, thus boosting revenues. Even though this statement is slightly more acceptable than the previous one because generally lower prices could give rise to higher demand, it features a key weakness: there is no evidence whatsoever that students who choose to live off-campus only consider price as a factor. For instance, students may prefer living out of the campus to have a higher degree of independence or to be closer to their families. As a consequence, reducing the rents does not guarantee in any way that demand for housing units would rise.

BUT the third one

Quote:
Furthermore, another flaw in the statement above is that even if lower rents may cause higher demand, one could not know whether revenues would grow. To illustrate this, assume a 20% decrease on rents, attracting 30 students to live on campus. There is no evidence that revenues are higher, even though occupancy rates certainly is (from x to x + 30). Thus, this statement is not acceptable and the campus housing officials should not take it into account.

There is slightly contradiction between the 2 and the 3. The first you say lower price does not guarantee to attract students. The third you talk about lower rent attracts 30 more students. It is not clear: they are off campus or within it ?? in the two scenarios ???

Not only that: you do not address how much is low the rent in %. it is too high the reduction the 30 more students, in any case, will not cover the extra fee. But even a reduction of 1\$ dollar could affect the scenario. More students will be attracted and the revenue will increase.

The bottom line is this: when you talk about stats you should be very specific because indeed you are talking about numbers.

For the rest is fairly good. Fluent and without, apparently, grammar errors.

regards
_________________
Re: Please review my AWA - GMAT date approaches..   [#permalink] 04 Aug 2017, 07:11
Display posts from previous: Sort by

# Events & Promotions

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.