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# Rumored declines in automobile-industry revenues are

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Senior Manager
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Rumored declines in automobile-industry revenues are [#permalink]

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29 Mar 2008, 14:42
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75% (02:28) correct 25% (02:01) wrong based on 8 sessions

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Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufactures’ share of the industry’s revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairers) had their share increase from 20 percent to 30 percent.

Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?

(A) The possibility is left open that the statistics for manufactures’ share of revenues come from a different source than the other statistics.
(B) No matter what changes the automobile industry’s overall revenues undergo, the total of all shares of these revenues must be 100 percent.
(C) No explanation is given for why the revenue shares of different sectors of the industry changed.
(D) Manufactures and parts companies depend for their revenue on dealers’ success in selling cars.
(E) Revenues are an important factor but are not the only factor in determining profits.
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29 Mar 2008, 16:24
Haha this is a funny one. B looks to be the obvious choice.

Vavali wrote:
Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufactures’ share of the industry’s revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairers) had their share increase from 20 percent to 30 percent.

Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?

(A) The possibility is left open that the statistics for manufactures’ share of revenues come from a different source than the other statistics.
(B) No matter what changes the automobile industry’s overall revenues undergo, the total of all shares of these revenues must be 100 percent.
(C) No explanation is given for why the revenue shares of different sectors of the industry changed.
(D) Manufactures and parts companies depend for their revenue on dealers’ success in selling cars.
(E) Revenues are an important factor but are not the only factor in determining profits.
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29 Mar 2008, 16:46
Can someone please explain why B is the case.
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29 Mar 2008, 20:33
Ok look at sentence 1. decline in automobile industry revenue - this is the revenue of the entire industry. The industry consists of manufacturers, parts suppliers and service companies. If you just look at what the individual share of these industry subtypes, you cannot determine the overall industry figures.

In simpler terms lets say the population of USA is built up of population of 2 states California 50% and Illinois 50%. Now these states population percentage will add up to 100% of USA's population. So say next year California's population share increases to 80% and Illinois's share decreases to 20%. This statistic can not tell us whether the overall population of US increased or decreased.

Vavali wrote:
Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufactures’ share of the industry’s revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairers) had their share increase from 20 percent to 30 percent.

Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?

(A) The possibility is left open that the statistics for manufactures’ share of revenues come from a different source than the other statistics.
(B) No matter what changes the automobile industry’s overall revenues undergo, the total of all shares of these revenues must be 100 percent.
(C) No explanation is given for why the revenue shares of different sectors of the industry changed.
(D) Manufactures and parts companies depend for their revenue on dealers’ success in selling cars.
(E) Revenues are an important factor but are not the only factor in determining profits.
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29 Mar 2008, 21:21
Iconcur with B.

Vavali wrote:
Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufactures’ share of the industry’s revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairers) had their share increase from 20 percent to 30 percent.

Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?

(A) The possibility is left open that the statistics for manufactures’ share of revenues come from a different source than the other statistics.
(B) No matter what changes the automobile industry’s overall revenues undergo, the total of all shares of these revenues must be 100 percent.
(C) No explanation is given for why the revenue shares of different sectors of the industry changed.
(D) Manufactures and parts companies depend for their revenue on dealers’ success in selling cars.
(E) Revenues are an important factor but are not the only factor in determining profits.

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30 Mar 2008, 00:10
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I would like to go with C.

The conclusion: automobile-industry revenues decline are exaggerated

The evidence: Change in the share of revenues of the various auto-subsectors.

Like someone gave the analogy of the US population between 2 states...even when there is a change in the share of the population, it does not give any indication of whether the population (in nos) has changed. Likewise, in this example, the revenue share must have changed, but the evidence does not support the conclusion of whey the rumored revenue decline is exaggerated.

Please correct me if I am thinking wrong.
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30 Mar 2008, 09:19
Thanks for the explanation bsd_lover. The OA is B
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Re: Rumored declines in automobile-industry revenues are [#permalink]

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01 May 2012, 08:44
Is it a " flaw in the argument"-type question?
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Re: Rumored declines in automobile-industry revenues are [#permalink]

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01 May 2012, 23:20
mofasser08 wrote:
Is it a " flaw in the argument"-type question?

Yes, I think so.
The changes in the share between the sectors of that industry don't explain why the total revenues have not declined.
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Re: Rumored declines in automobile-industry revenues are   [#permalink] 01 May 2012, 23:20
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