The government should stop permitting tobacco companies to : GMAT Critical Reasoning (CR)
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# The government should stop permitting tobacco companies to

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Manager
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Joined: 11 Dec 2009
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The government should stop permitting tobacco companies to [#permalink]

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31 Jan 2010, 05:53
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Question Stats:

50% (02:23) correct 50% (01:38) wrong based on 12 sessions

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The government should stop permitting tobacco companies to subtract
advertising expenses from their revenues in calculating taxable income. Tobacco
companies would then have to pay more taxes. As a consequence, they would
raise the prices of their products and this price increase would raise the prices of
their products and this price increase would discourage tobacco use.
Which of the following is an additional premise required by the argument above?
(A) Tobacco companies would not offset the payment of extra taxes by reducing
costs in other areas.
(B) Tobacco companies would not continue to advertise if they were forced to
pay higher taxes.
(C) People would not continue to buy tobacco products if these products were no
(D) The money the government would gain as a result of the increase in tobacco
companies’ taxable income would be used to educate the public about the
dangers of tobacco use.
(E) The increase in taxes paid by tobacco companies would be equal to the
additional income generated by raising prices.
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Re: CR Resource [#permalink]

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31 Jan 2010, 23:48
Argument relies on the assumption that there will be no other choice for tobacco companies except to raise prices. But if they can reduce some other costs, prices may remain the same. IMO (A)
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Re: CR Resource [#permalink]

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01 Feb 2010, 03:00
shalva wrote:
Argument relies on the assumption that there will be no other choice for tobacco companies except to raise prices. But if they can reduce some other costs, prices may remain the same. IMO (A)

IMO A, for the same reason
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Re: CR Resource [#permalink]

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06 Aug 2010, 19:32
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Re: CR Resource [#permalink]

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07 Aug 2010, 11:43
A for me too.
Re: CR Resource   [#permalink] 07 Aug 2010, 11:43
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# The government should stop permitting tobacco companies to

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