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16 Jul 2019, 06:13
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Tata recently introduced a low-priced fully functional car - Nano – aimed at the middle-class population of India. However, since car ownership is considered a status symbol, the low pricing of the car is likely to deter most middle-class Indians from going for the Nano. Therefore, Nano is not going to account for a significant proportion of car sales in India.
Which of the following is an assumption on which the argument depends?
A. The upper middle class who can afford much more expensive cars are not likely to purchase a much cheaper alternative as a backup mode of transportation.
B. The Nano will reduce the proportion of profits Tata makes from the sale of low-priced category of cars in India.
C. The middle-class people buy expensive assets only when their everyday needs are met.
D. A person is not likely to buy a second car to serve as a mode of transportation just in case his/her first preference fails to achieve its goal.
E. While purchasing a particular model of a car, the price paid depends on the economic standing of the buyer.
VeritasKarishma
Which of the following is an assumption on which the argument depends?
A. The upper middle class who can afford much more expensive cars are not likely to purchase a much cheaper alternative as a backup mode of transportation.
B. The Nano will reduce the proportion of profits Tata makes from the sale of low-priced category of cars in India.
C. The middle-class people buy expensive assets only when their everyday needs are met.
D. A person is not likely to buy a second car to serve as a mode of transportation just in case his/her first preference fails to achieve its goal.
E. While purchasing a particular model of a car, the price paid depends on the economic standing of the buyer.
VeritasKarishma
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16 Jul 2019, 06:35
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Ahh Nano Car - a guy from West Bengal can understand the commotion it created.
akash7gupta11 Do you have any doubt? if so could you please know.
akash7gupta11 Do you have any doubt? if so could you please know.
16 Jul 2019, 22:28
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akash7gupta11
Car ownership is considered a status symbol.
Nano, aimed at middle class, has very low price so middle class will not buy it (since they will be considered to have lower status if they buy a low price car).
Conclusion: Nano will not sell much.
Assumption:
A. The upper middle class who can afford much more expensive cars are not likely to purchase a much cheaper alternative as a backup mode of transportation.
A segment of the middle class will not buy it as a backup. Yes, this is an assumption when we say that Nano will not sell much. Middle class may not buy it as their first car but what if upper middle class people, who buy much more expensive cars as their first/second cars, buy it as a backup (for example, for their drivers to run errands independently). Then the status symbol is the expensive car and Nano can still sell well. Hence, when we say that Nano will not sell, we are assuming that upper middle class will not buy is as a much cheaper backup.
Though how many people fall in the upper middle category and whether their purchase would account for "significant proportion of car sales in India" is still questionable.
B. The Nano will reduce the proportion of profits Tata makes from the sale of low-priced category of cars in India.
Nano's sale as proportion of Tata profits is irrelevant.
C. The middle-class people buy expensive assets only when their everyday needs are met.
Irrelevant. When do middle class people buy expensive assets, we don't care.
D. A person is not likely to buy a second car to serve as a mode of transportation just in case his/her first preference fails to achieve its goal.
If the first car fails to serve as a mode of transportation, a person may buy a second car but what says that he will buy a much cheaper second car? Option (A) is far more specific.
E. While purchasing a particular model of a car, the price paid depends on the economic standing of the buyer.
Not an assumption. The argument says that the car reflects the status of the buyer. So middle class will buy more expensive cars.
Option (A) is the best of the given options.
