Sab2 wrote:
Quick question regarding Option D -
Since Mammoth along with 2 other brands accounted for bulk of last year's sales, the market might have already reached a saturation point. So even with continuing the already extensive advertising the sales might not increase. Even from the premise, Mammoth might have already taken advantage of the dramatic increase in sales last year and there is no mention of current market demand. Why can this not be a possibility?
As a counter for option E -
Aren't these two events independent
1. The decline in sales last year
2. The possibility of no future increase in sales with expanding production and continuing the advertising.
Thanks
To answer the question, we are looking for the answer choice that "provides
most support for the view that Mammoth Industries cannot increase its sales." So a couple of answer choices could leave open the
possibility that Mammoth cannot increase its sales -- our task is to determine which provides the most support for this position.
Quote:
(D) Mammoth Industries' telephone is one of three brands of telephone that have together accounted for the bulk of the last year's increase in sales.
To go with (D), you have to make the assumption that Mammoth's increase in sales last year have saturated the market. This assumption is not supported by the passage -- while it is
possible that the increased demand for Mammoth phones was just a one-year phenomenon, you can't conclude that this is true based on the given information.
If anything, the information in (D) makes it more likely that Mammoth's plan will succeed -- demand is up, so the advertising campaign is working! Nothing indicates that this trend will reverse itself, so it seems like a good time to produce more telephones.
Quote:
(E) Despite a slight decline in the retail price, sales of Mammoth Industries' telephones have fallen in the last year.
(E), on the other hand, paints a different picture: sales of Mammoth phones have fallen in the past year, even if the industry as a whole is doing well. Mammoth even decreased its retail prices, and yet demand for their product is still down.
So what do Mammoth executives plan to do? They will continue with the same advertising program -- which was clearly not very effective, as sales are down -- and just produce more telephones. Because demand declined last year and Mammoth is not doing anything to address this issue, simply increasing production will not somehow increase sales.
(E) provides strong support for the position that Mammoth cannot increase its sales with the given plan, so (E) is the correct answer.
I hope that helps!
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