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The fee a certain plumber charges for service is based on

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The fee a certain plumber charges for service is based on a  [#permalink]

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31 Jul 2012, 20:15
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The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.
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31 Jul 2012, 20:37
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.

what is your question in the above..
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31 Jul 2012, 20:49
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.

As per my understadning, OA should be C. Questions ask us that how the cost-plus method is advantageous to customers because as per C, plumbers are not adding labour cost. I f hey add labour cost also then,it will be very costly for customers,Thus, not adding labour cost is advantageous for customers for plumbers service.

Where am I wrong?
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31 Jul 2012, 23:04
bhavinshah5685 wrote:
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.

As per my understadning, OA should be C. Questions ask us that how the cost-plus method is advantageous to customers because as per C, plumbers are not adding labour cost. I f hey add labour cost also then,it will be very costly for customers,Thus, not adding labour cost is advantageous for customers for plumbers service.

Where am I wrong?

The stem reads "Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

So u need to give a reason criticizing the cost-plus method as economical advantage for customers.

C is strengthening the advantage, not criticizing the economic adv of customers. Hence A
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Re: The fee a certain plumber charges for service is based on a  [#permalink]

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01 Aug 2012, 11:37
IMO A

The practicing of "surplusprice" is a disavantage for custormers. We have to find a choice that confirm this.

A it is
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Re: The fee a certain plumber charges for service is based on a  [#permalink]

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01 Aug 2012, 15:59
The stem is pretty confusing for this question. Nevertheless, A is my answer.

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
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01 Aug 2012, 18:41
Capricorn369 wrote:
The stem is pretty confusing for this question. Nevertheless, A is my answer.

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.

I think is good as a question with a simple premise and conclusion. it has all the elements to be used for the purpose
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03 Aug 2012, 12:21
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.

+A
The only criticism of cost-plus pricing as an economically helpful method...
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The fee a certain plumber charges for service is based on  [#permalink]

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26 Nov 2013, 07:08
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The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A. It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.

B. The percentage added to the cost of an item has decreased over the past several years.

C. The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.

D. Some past clients have criticized the quality of the plumber's work.

E. The "cost-plus" pricing method has been used by other plumbers in the region.
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Re: The fee a certain plumber charges for service is based on  [#permalink]

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26 Nov 2013, 11:33
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Gnpth wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A. It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.

B. The percentage added to the cost of an item has decreased over the past several years.

C. The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.

D. Some past clients have criticized the quality of the plumber's work.

E. The "cost-plus" pricing method has been used by other plumbers in the region.

Dear Gnpth,
I'm happy to help.

This prompt argument is unusually short. In that sense, I believe it may be a bit unrepresentative of what you will see on the GMAT.

We want a fact that will be bad for the customer of this plumber --- a reason it might be disadvantageous for a customer to choose a plumber who uses "cost-plus" pricing. Presumably, this could mean that the customer is overcharged --- bad for the customer, good for the plumber.

(A) It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
If the plumber uses expensive items, especially unnecessarily, this will inflate his fee, which is good for the plumber, not good for the customer. This is a promising answer to the question.

(B) The percentage added to the cost of an item has decreased over the past several years.
First of all, this would be vaguely beneficial to the customer, and it's not clear that this speaks to anything inherently fair or unfair about the "cost-plus" price scheme itself. This is not correct.

(C) The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
Well, this definitely would be to the disadvantage of the plumber and the advantage of the customer. This is not correct.

(D) Some past clients have criticized the quality of the plumber's work.
Hmmm. Tempting. This, though, is more a problem with the plumber himself, not really a problem with the "cost-plus" scheme of charging. In other words, if this plumber actually does low quality work, than that would be a detriment regardless of the pricing scheme he used. This is not correct.

(E) The "cost-plus" pricing method has been used by other plumbers in the region.
This is neutral. Perhaps it's a good sign, meaning that it's a fair practice, or perhaps it's a bad sign --- it's a slanted scheme that allows plumbers to exploit their customers. This may be relevant or may not be. We don't have enough information. This is not correct.

The only possible answer is (A), the OA.

Here's a blog about weakening the argument.
http://magoosh.com/gmat/2012/how-to-wea ... reasoning/

Does this make sense?

Mike
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Re: The fee a certain plumber charges for service is based on  [#permalink]

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28 Nov 2013, 20:06
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Here is the official explanation from Kaplan.

Answer A - The actual question here is particularly complicated. We're asked for a criticism of the economic advantage of this method of pricing from the customer's point of view. In other words, how could the plumber cheat the customer? The method is that the plumber charges the customer a set price for the items used for the work and adds a set percentage. Thus, a project using high-priced items is economically advantageous for the plumber; a project using low-priced items is advantageous for the customer. Since the plumber chooses the tools (items) necessary for the job, it's advantageous to choose the highest-priced items, which will also increase the percentage received. Choice (A) gives the disadvantage of this plan for the customer—an unscrupulous plumber could choose the highest-costing items, whether they are necessary or not. Choice (A) is the correct answer.

Choice (B) is a 180; a decrease in the percentage would be advantageous for the customer, not the plumber. Choice (C) is out of scope—we already know the cost is based solely on the items used and a set percentage, not labor. Moreover, it would be to the customer's advantage not to have to pay for labor if a job takes a long time. Choice (D) is out of scope; the quality of work is not an issue, only the method of pricing is. Choice (E) is also out of scope; the number of plumbers using the method is not the issue, only its economic advantageousness. Moreover, if anything, this would strengthen the argument, since it implies that customers in the region are satisfied enough with the method not to avoid plumbers who use it.

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Re: The fee a certain plumber charges for service is based on a  [#permalink]

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28 Nov 2013, 20:16
Here is the official explanation from Kaplan

Answer A The actual question here is particularly complicated. We're asked for a criticism of the economic advantage of this method of pricing from the customer's point of view. In other words, how could the plumber cheat the customer? The method is that the plumber charges the customer a set price for the items used for the work and adds a set percentage. Thus, a project using high-priced items is economically advantageous for the plumber; a project using low-priced items is advantageous for the customer. Since the plumber chooses the tools (items) necessary for the job, it's advantageous to choose the highest-priced items, which will also increase the percentage received. Choice (A) gives the disadvantage of this plan for the customer—an unscrupulous plumber could choose the highest-costing items, whether they are necessary or not. Choice (A) is the correct answer.

Choice (B) is a 180; a decrease in the percentage would be advantageous for the customer, not the plumber.

Choice (C) is out of scope—we already know the cost is based solely on the items used and a set percentage, not labor. Moreover, it would be to the customer's advantage not to have to pay for labor if a job takes a long time.

Choice (D) is out of scope; the quality of work is not an issue, only the method of pricing is.

Choice (E) is also out of scope; the number of plumbers using the method is not the issue, only its economic advantageousness. Moreover, if anything, this would strengthen the argument, since it implies that customers in the region are satisfied enough with the method not to avoid plumbers who use it.
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Re: The fee a certain plumber charges for service is based on  [#permalink]

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02 Aug 2014, 15:39
it is either that the question stem is worded wrongly or I do not understand what is meant. in the question posted 'Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?, option 'C' should be the correct answer. except it is reworded as '...economically disadvantageous method.... can someone please see reasons with me???
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Re: The fee a certain plumber charges for service is based on  [#permalink]

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01 Nov 2014, 21:56
Can anybody please explain what kind of answer choice is expected to be selected ?
I mean to ask... how will I get to know whether this asks for strengthening, weakening, or evaluate answer choice and in whose favor... plumber or customer ?

The language confused me to select D... assuming that if the plumber is not taking labor charges... then in a way.. it's helping customers.
Where am I going wrong ?

Regards,
Puneet
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Re: The fee a certain plumber charges for service is based on a  [#permalink]

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06 Jun 2016, 09:33
The stimulus mentions cost plus model works on a fixed percent + cost of all items used to do a work.

We are asked to weaken this argument and this conclusion on how cost plus works is a prime candidate for pre-thinking in that to charge for different tools / items used is a way to charge more than that is required.

Clearly of all the answers only A matches this and will weaken the argument.

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
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