It is currently 19 Nov 2017, 19:31

### 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

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Surveys show that every year only 10 percent of cigarette

Author Message
Senior Manager
Joined: 31 May 2006
Posts: 368

Kudos [?]: 20 [0], given: 0

Location: Phoenix AZ
Surveys show that every year only 10 percent of cigarette [#permalink]

### Show Tags

23 Jul 2006, 12:01
00:00

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions

### HideShow timer Statistics

Surveys show that every year only 10 percent of cigarette smokers switch brands. Yet the manufacturers have been spending an amount equal to 10 percent of their gross receipts on cigarette promotion in magazines. It follows from these figures that inducing cigarette smokers to switch brands did not pay, and that cigarette companies would have been no worse off economically if they had dropped their advertising.

Of the following, the best criticism of the conclusion that inducing cigarette smokers to switch brands did not pay is that the conclusion is based on
(A) computing advertising costs as a percentage of gross receipts, not of overall costs
(B) past patterns of smoking and may not carry over to the future
(C) the assumption that each smoker is loyal to a single brand of cigarettes at any one time
(D) the assumption that each manufacturer produces only one brand of cigarettes
(E) figures for the cigarette industry as a whole and may not hold for a particular company

Kudos [?]: 20 [0], given: 0

Manager
Joined: 15 Nov 2005
Posts: 241

Kudos [?]: 81 [0], given: 0

Location: Italy

### Show Tags

23 Jul 2006, 12:15
seems A
_________________

â€œIf money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.â€

Kudos [?]: 81 [0], given: 0

SVP
Joined: 30 Mar 2006
Posts: 1728

Kudos [?]: 102 [0], given: 0

### Show Tags

24 Jul 2006, 03:41
Will go with D.

IMO if a tabacco company produces more than a brand of cig and knows the fact that nearly 10% smokers switch brands, it would be wise to attract that 10% using different brands.

Kudos [?]: 102 [0], given: 0

Director
Joined: 17 Jul 2006
Posts: 700

Kudos [?]: 13 [0], given: 0

### Show Tags

24 Jul 2006, 06:40
I will go with D.

Kudos [?]: 13 [0], given: 0

Manager
Joined: 15 Nov 2005
Posts: 241

Kudos [?]: 81 [0], given: 0

Location: Italy

### Show Tags

24 Jul 2006, 06:42
true clear winner in this case is D
_________________

â€œIf money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.â€

Kudos [?]: 81 [0], given: 0

Senior Manager
Joined: 31 May 2006
Posts: 368

Kudos [?]: 20 [0], given: 0

Location: Phoenix AZ

### Show Tags

24 Jul 2006, 08:43
OA is E.

Kudos [?]: 20 [0], given: 0

Manager
Joined: 12 Jul 2006
Posts: 67

Kudos [?]: 5 [0], given: 0

Location: Boston

### Show Tags

24 Jul 2006, 09:32
I narrowed it down to C and E. But chose C as my answer. Obviously wrong.

Thinking about it E is better because if the survey results are based on the whole industry, it may not be applicable for all the comapies (only for a majority of the companies)

What is the OE?
_________________

Good is the greatest enemy of great.

Kudos [?]: 5 [0], given: 0

Senior Manager
Joined: 31 May 2006
Posts: 368

Kudos [?]: 20 [0], given: 0

Location: Phoenix AZ

### Show Tags

24 Jul 2006, 17:18
There is no OE.

Kudos [?]: 20 [0], given: 0

Director
Joined: 18 Jul 2006
Posts: 523

Kudos [?]: 71 [0], given: 0

### Show Tags

25 Jul 2006, 18:29
E is still not clear. I'd stick with D.

Kudos [?]: 71 [0], given: 0

CEO
Joined: 20 Nov 2005
Posts: 2892

Kudos [?]: 336 [0], given: 0

Schools: Completed at SAID BUSINESS SCHOOL, OXFORD - Class of 2008

### Show Tags

25 Jul 2006, 18:54
mailtheguru wrote:
There is no OE.

I think OA is correct.

Allow me to explain:

Total Industry spending = 100
Company X spent on advertising = 1
Smokers switched = 10%
Out of these 10%, 9.9% switched to company X's brands.
Even though advertising did not work for industry as a whole but it worked for company X. So companies should continue advertising. Argument fails.
_________________

SAID BUSINESS SCHOOL, OXFORD - MBA CLASS OF 2008

Kudos [?]: 336 [0], given: 0

Director
Joined: 06 May 2006
Posts: 790

Kudos [?]: 40 [0], given: 2

### Show Tags

26 Jul 2006, 10:32
Yeah, going with E after reading OA But one could arrive at the answer through PoE...

A) A cost is a cost. Doesn't matter what ratio you show it as. Does not affect conclusion.
C) Doesn't matter... A smoker may be loyal to multiple brands of cigs, and still he can shift from one brand to another.
D) Doesn't matter too! A cig company may try to move smokers from cheaper smokes to the more expensive brands in their own company line up.
E) Last man standing...

But this is all in retrospect... I could not solve this one Hope nothing like this comes up in my test!
_________________

Uh uh. I know what you're thinking. "Is the answer A, B, C, D or E?" Well to tell you the truth in all this excitement I kinda lost track myself. But you've gotta ask yourself one question: "Do I feel lucky?" Well, do ya, punk?

Kudos [?]: 40 [0], given: 2

Manager
Joined: 05 Jun 2006
Posts: 111

Kudos [?]: 2 [0], given: 0

Location: London

### Show Tags

31 Jul 2006, 09:56
Gauss wrote:
true clear winner in this case is D

D would actually strengthen the conclusion.
Torn between C and E.
Chose C - however on reflection, E is better.

Kudos [?]: 2 [0], given: 0

Manager
Joined: 09 Jul 2006
Posts: 162

Kudos [?]: 2 [0], given: 0

### Show Tags

31 Jul 2006, 11:59
Can anyone explain what does question ask ? ( in a normal language )
I have no idea what the meaning of question is so I don't know
how I can solve the problem.

Kudos [?]: 2 [0], given: 0

SVP
Joined: 31 Jul 2006
Posts: 2302

Kudos [?]: 483 [0], given: 0

Schools: Darden

### Show Tags

31 Jul 2006, 13:04
I have to say, I don't like any of the answer choices. The real problem with the argument is that if they stopped advertising altogether, they would lose market share to other manufacturers that continued to advertise. In other words, they have to advertise just to maintain their market share - they alternative would be to lose market share. Advertising, in this case, would not really relate to the number of people that switch brands. The passage seems to suggest that dropping advertising altogether would be an option, but that would call for all manufacturers to collude and stop advertising.

Also, another major flaw is that cigarette manufacturers do not only spend money on advertising to get customers to switch from other brands. They pay for advertising to get non-smokers to use their product. This concept is completely ignore by the passage, which only compares gross receipts to brand-switchers. A cigarette manufacturer might well be willing to spend 10% of its gross receipts on advertising of ZERO people switched form other brands, as long the advertising attracted enough new customers. Again, advertising doesn't at all relate to getting people to swtich brands.

Since the above flaws are not among the options, I will go with A. One could reason that even though only 10 percent of cigarette smokers switch brands each year, it may cost far more than than 10% of gross receipts to acquire these new customers.

I will also say that this question is logically flawed and that GMAT questions do not have unexplained holes like this question has. As a 99.9% scorer on the LAST (9 years ago, yikes!) and a graduate of a top 5 law school I feel qualified to say so. I'm curious as to where this question is from. I would wager that it did not come from the OG?

Kudos [?]: 483 [0], given: 0

Re: CR Cigarette   [#permalink] 31 Jul 2006, 13:04
Display posts from previous: Sort by

# Surveys show that every year only 10 percent of cigarette

Moderators: GMATNinjaTwo, GMATNinja

 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®.