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# Surveys show that every year only 10 percent of cigarette

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Manager
Joined: 02 May 2008
Posts: 87
Surveys show that every year only 10 percent of cigarette [#permalink]

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15 Jul 2008, 09:20
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27% (02:27) correct 73% (01:42) wrong based on 1543 sessions

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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
[Reveal] Spoiler: OA
Senior Manager
Joined: 29 Aug 2005
Posts: 272
Re: CR-Cigarette smokers [#permalink]

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15 Jul 2008, 12:58
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry

this looks like an LSAT question to me
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Senior Manager
Joined: 25 Nov 2006
Posts: 265
Re: CR-Cigarette smokers [#permalink]

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15 Jul 2008, 13:07
E for me too...but C is a close call.....(at one time....is what swayed the balance)
Senior Manager
Joined: 24 Feb 2007
Posts: 263
Location: nj
Re: CR-Cigarette smokers [#permalink]

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15 Jul 2008, 13:25
IMO its C

the conclusion is based on cig. promotion and a company will only promote its cigarette. so the best criticism would be if people are smoking more than one brand at a time than its a waste of money to promote its cig.
Manager
Joined: 02 May 2008
Posts: 87
Re: CR-Cigarette smokers [#permalink]

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17 Jul 2008, 06:03
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry

vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still don't understand why

Last edited by MamtaKrishnia on 21 Jul 2008, 23:19, edited 1 time in total.
Senior Manager
Joined: 25 Nov 2006
Posts: 265
Re: CR-Cigarette smokers [#permalink]

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17 Jul 2008, 06:36
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MamtaKrishnia wrote:
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry

vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still understand why

Let me try and explain this to you.

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

Break this down.

Conclusion : Inducing cigarette smokers to switch brands did not pay dividends.

Evidence 1 : Surveys show that every year only 10 percent of cigarette smokers switch brands.
Evidence 2 : Cigarette companies would have been no worse off economically if they had dropped their advertising.

What really links the evidence to the conclusion?

1. That the surveys are accurate and that they can be generalised.
2. The companies sales are dependent on the survey(no matter what the company does).

What can turn this around??

Option 1 : Surveys are not accurate
Option 2: Companies sales are not dependent on the survey and they can influence customers to change brands by different strategies.

Option 1 is not there in the answer choices
Option 2 is what E talks about...hence E.

C was close (if 'at any one time' was not present in the answer choice), what it does is weakens what the survey tries to prove, and thus strengthens option 1.
Senior Manager
Joined: 24 Feb 2007
Posts: 263
Location: nj
Re: CR-Cigarette smokers [#permalink]

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17 Jul 2008, 07:22
I understand your reasoning below. but i still think that C is a better option because author says in E that the figures may not hold good for a particular company. But author is not talking about any particular company in the argument hes talking about "cigarette companies". Had he been specifically mentioned company XYZ in the paragraph then E would have been a better choice.

please do let me know if my understanding here is wrong.
Director
Joined: 06 Jan 2008
Posts: 546
Re: CR-Cigarette smokers [#permalink]

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17 Jul 2008, 07:27
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MamtaKrishnia wrote:
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry

vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still understand why

Paraphrasing the argument:
Inspite of spending large amounts of money, only 10% switched brands. (in the entire industry)
So, why to spend so much money when you see only 10% results?

Sounds reasonable. But there is a problem.

Lets say the entire smoking industry consists of 2 companies A and B with 50 customers each.
And each company spends money to make customers switch the brand.
So total industry smokers = 100.

After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).
And if you tell him "why to spend so much money when you see only 10% results?" he will not accept it.Because he is seeing good results.
But at the same time, A's CEO may accept the above statement.

So now, the fact(10% swithched brands) which is true to the entire industry is NOT true to the company B. (due to +ve change)

And thats exactly what option E is saying.
nice question. +1 to you.
Senior Manager
Joined: 25 Nov 2006
Posts: 265
Re: CR-Cigarette smokers [#permalink]

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17 Jul 2008, 07:32
neeshpal wrote:
I understand your reasoning below. but i still think that C is a better option because author says in E that the figures may not hold good for a particular company. But author is not talking about any particular company in the argument hes talking about "cigarette companies". Had he been specifically mentioned company XYZ in the paragraph then E would have been a better choice.

please do let me know if my understanding here is wrong.

Think about what you are set out to do here ....you are vouching for the Author right? Don't play the devils advocate here.

Here in E -'figures may not hold good for a particular company'. The 'particular company' could very well be the company in referrence here right??
VP
Joined: 03 Apr 2007
Posts: 1342
Re: CR-Cigarette smokers [#permalink]

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17 Jul 2008, 10:14
The CR is based on a simple concept- One company's loss is another company's Gain

The author is assuming that spending 10% of gross receipts to induce 10% of cigarette smokers switch brands is not worth the money.

A statement that will prove the assumption is flawed will criticze the conclusion.

E
Manager
Joined: 02 May 2008
Posts: 87
Re: CR-Cigarette smokers [#permalink]

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19 Jul 2008, 06:56
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saravalli wrote:
Paraphrasing the argument:
Inspite of spending large amounts of money, only 10% switched brands. (in the entire industry)
So, why to spend so much money when you see only 10% results?

Sounds reasonable. But there is a problem.

Lets say the entire smoking industry consists of 2 companies A and B with 50 customers each.
And each company spends money to make customers switch the brand.
So total industry smokers = 100.

After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).
And if you tell him "why to spend so much money when you see only 10% results?" he will not accept it.Because he is seeing good results.
But at the same time, A's CEO may accept the above statement.

So now, the fact(10% swithched brands) which is true to the entire industry is NOT true to the company B. (due to +ve change)

And thats exactly what option E is saying.

saravalli,
This is an awesome explanation ...
Thanks a ton ..this really helped. +1
Senior Manager
Joined: 24 Feb 2007
Posts: 263
Location: nj
Re: CR-Cigarette smokers [#permalink]

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19 Jul 2008, 11:02
I am not vouching for author here. My sole intent was to understand this CR. I just used "author" to refer to the paragraph.

Thanks to all the explanations above. They helped a lot.

Ashwin_Mohan wrote:
neeshpal wrote:
I understand your reasoning below. but i still think that C is a better option because author says in E that the figures may not hold good for a particular company. But author is not talking about any particular company in the argument hes talking about "cigarette companies". Had he been specifically mentioned company XYZ in the paragraph then E would have been a better choice.

please do let me know if my understanding here is wrong.

Think about what you are set out to do here ....you are vouching for the Author right? Don't play the devils advocate here.

Here in E -'figures may not hold good for a particular company'. The 'particular company' could very well be the company in referrence here right??
Manager
Joined: 04 Apr 2008
Posts: 215
Location: Pune
Re: CR-Cigarette smokers [#permalink]

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20 Jul 2008, 20:16
is that E or A..........................
can anyone explain me the answer????????????????????????
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Intern
Joined: 29 Jul 2010
Posts: 45
Re: CR-Cigarette smokers [#permalink]

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19 Aug 2010, 22:14
Its a clear E
Manager
Joined: 18 Oct 2008
Posts: 191
Re: CR-Cigarette smokers [#permalink]

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19 Aug 2010, 22:26
1
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mymba99 wrote:
MamtaKrishnia wrote:
vdhawan1 wrote:
i think E is the correct answer on this one

because it might be possible that the figures ( as in our example) for one company might not reflect the status of the industry

vdhawan1,
The argument says 'manufacturers have been spending' . This means the industry in general not one company.
Also what option E states is
figures for the cigarette industry as a whole and may not hold for a particular company
Which means the concepts that apply to the whole may not always apply to the parts.

This is what confused me too. Because the other way around it makes sense.

In any case OA is E.
But i still understand why

Paraphrasing the argument:
Inspite of spending large amounts of money, only 10% switched brands. (in the entire industry)
So, why to spend so much money when you see only 10% results?

Sounds reasonable. But there is a problem.

Lets say the entire smoking industry consists of 2 companies A and B with 50 customers each.
And each company spends money to make customers switch the brand.
So total industry smokers = 100.

After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).
And if you tell him "why to spend so much money when you see only 10% results?" he will not accept it.Because he is seeing good results.
But at the same time, A's CEO may accept the above statement.

So now, the fact(10% swithched brands) which is true to the entire industry is NOT true to the company B. (due to +ve change)

And thats exactly what option E is saying.
nice question. +1 to you.

Awesome Explanation.! i picked C though..
Senior Manager
Joined: 12 Oct 2009
Posts: 265
Schools: Columbia, INSEAD, RSM, LBS
Re: CR-Cigarette smokers [#permalink]

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20 Aug 2010, 10:49
got confused between C and E but after the reasoning given above, would go with E
Senior Manager
Joined: 12 Oct 2009
Posts: 265
Schools: Columbia, INSEAD, RSM, LBS
Re: CR-Cigarette smokers [#permalink]

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20 Aug 2010, 10:49
got confused between C and E but after the reasoning given above, would go with E
Manager
Joined: 04 Aug 2010
Posts: 154
Re: CR-Cigarette smokers [#permalink]

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20 Aug 2010, 11:16
mymba99 wrote:
After 1 year, lets say 10 smokers from A switched to B.
So, A = 40, B = 60. So we can say in the entire industry, 10 % swithced the brand.
BUT, lets see what B's CEO thinks. TO him, the increase is 20%. ( last year = 50, this year = 60, percentage of increase = 20).

this clears it up for me. i would've never thought of this reasoning. thanks
Manager
Joined: 29 Sep 2008
Posts: 143
Re: CR-Cigarette smokers [#permalink]

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16 Oct 2010, 12:04
according to C if people are smoking more than 2 brands then it is bringing more revenue to the comany and even if the company is spending 10% on advertisment still it is getting more profit than whne it would have earned by dropping the advertisment.so it weakens the conclusion
Manager
Joined: 27 Jul 2010
Posts: 86
Re: CR-Cigarette smokers [#permalink]

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24 Aug 2011, 05:11
pretty complicated for me
CR are the toughest section for me
Re: CR-Cigarette smokers   [#permalink] 24 Aug 2011, 05:11

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# Surveys show that every year only 10 percent of cigarette

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