The Green Peas Grocery Store in the remote wealthy enclave of Luxville

Question

The Green Peas Grocery Store in the remote wealthy enclave of Luxville charges more than the Green Peas Grocery Store in Oak City charges for the same items. Clearly, on any given item, the Green Peas grocery franchise is taking advantage of its location in Luxville to reap higher profits on that item.

In evaluating the argument, it would be most useful to compare

(A) The selection of specialty items in the Oak City location with the selection of specialty items in the Luxville location

(B) The cost of transporting merchandise to the Oak City location with the comparable cost to the Luxville location

(C) The average cost of the same or comparable items at other grocery stores in Oak City with the average cost at other stores in Luxville

(D) The percent of average household income spent on groceries in Oak city with the comparable percentage in Luxville

(E) The cost of these items in Oak City and in Luxville with the cost at other Green Peas stores throughout the state.

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siddhantvarma · Answer

Argument: Luxville store is taking advantage of its location to reap higher profits on the same item.
Evidence: Luxville store charges more than the Oak City store for the same items.

Even without looking at the answer choices, we can see that the argument assumes the price difference is due to the store taking advantage of its location to increase profits. What about other factors like operating costs, transportation of goods, etc?

(A) The selection of specialty items in the Oak City location with the selection of specialty items in the Luxville location
Specialty item selections doesn't address why identical items have different prices => Eliminate

(B) The cost of transporting merchandise to the Oak City location with the comparable cost to the Luxville location
Good, this explains why Luxville store could be pricing the same items on a higher side. They want to cover the costs. If it costs significantly more to transport goods to Luxville, the higher prices might simply cover these additional costs rather than generate extra profit. But wait, cost of transporting  merchandise ? Is it the same thing as the items argument was talking about? Or does it cover general cost of transporting all the items? If it's the latter, why should they set higher prices on a specific item? B looks good, with some flaws, but let's keep it for now.

(C) The average cost of the same or comparable items at other grocery stores in Oak City with the average cost at other stores in Luxville
Average costs at other stores could show if the price difference is not a one-off for this specific store and reflects the general market conditions in each area. If all stores in Luxville charge more than Oak City, this indicates that Green Peas is not exploiting its location but rather trying to match its costs. Keep C.

(D) The percent of average household income spent on groceries in Oak city with the comparable percentage in Luxville
Average household income spent doesn't tell us anything related to the argument. Irrelevant => Eliminate.

(E) The cost of these items in Oak City and in Luxville with the cost at other Green Peas stores throughout the state.
Other location stores are again irrelevant for comparison here. We're simply interested in Oak City and Luxville ones. Eliminate

We're stuck between B and C, I think C more directly addresses whether Green Peas is taking advantage of its location. If average costs for all stores is the same, whatever may be the reason, we know there are some costs associated with the location due to which they need to set higher prices. Moreover, we already have some flaws with B so we can discard it now.

Correct answer: (C)

cburchfield · Answer

For C could it be possible that other grocery stores are also taking advantage of their customers? Knowing the cost of transportation would tell if weather or not they are truly being exploited. I can see knowing the cost could tell you more about weather the pricing was justified.

siddhantvarma · Answer

You’re right that if other grocery stores in Luxville are also charging more, they may be  all  taking advantage of wealthy customers. Consider this:

If one store has higher transportation cost, what about others? (B) only compares the transportation costs of both the stores. What if other stores face the same cost issue yet they don't set higher prices? There are ways like this where you could break B too.

You could also assume a ton of things against (B) such as how high are the transportation costs? Are they just high enough to justify the prices? Luxville store could have a higher transportation cost, set extremely high prices and still take advantage of the location because well people can afford right, why not charge higher?

We don't need to make far-fetched assumptions to justify or discard an answer choice. We need to stick to facts and everything given in the passage itself. So let's get back to the question.

We need to find the  best  answer choice.

- (B) (transportation costs) provides relevant information about operational expenses. It doesn't directly address whether the store is "taking advantage" of its  location  in the way that comparing market prices does. 
- I'm not convinced that the term "merchandise" refers to the same items that are being compared. They could be the same, they could also not be the same. How do we assume then if they are indeed the same? 
- If all grocery stores in Luxville charge more than those in Oak City, then Green Peas is simply matching the local market conditions rather than exploiting its location. The argument assumes that higher prices automatically mean exploitation. 
- General market trend gives me a more clear and definitive answer than a one-off comparison of transportation costs

cburchfield · Answer

Are you saying that weather the cost is an increase or not, the price could still be increased as a means of taking advantage of that customer base? Wouldn't a similar assumption be needed? Both grocery stores could be taking advantage of the customer base. And simply knowing the price of the other store wouldn't answer that question.
siddhantvarma

siddhantvarma · Answer

There’s always a possibility that  everyone  is taking advantage. But (C) tells us whether Green Peas is  aligning with local pricing norms  or  acting differently . If they’re in line with competitors, it weakens the claim that  Green Peas alone  is exploiting its location.
We’re evaluating  what would be most useful  to assess the argument’s claim. And  C  gives us a  broader, comparative context , which is  more useful  than looking at just  one cost factor  in isolation, which is what (B) is doing.

Imagine there’s a popular coffee shop chain.

They have two locations:
 
 One in  City A  
 One in  City B
   
You notice that the same cup of coffee costs  $5 in City A  but  $7 in City B .
Now you hear someone say: "City B is taking advantage of its location to make higher profits"

You find out that  it costs more to transport coffee beans  to City B because it’s farther away.

That seems relevant, but...
 
  Is transportation the only cost?  No. There are rent, staff salaries, taxes, etc. 
 Also,  even if  transportation costs are higher, does that fully explain the  $2 price difference ?
 You don’t know. It’s only  one factor , and you’re missing the bigger picture.
 City B could still be charging  way  more than needed to cover its costs.  
Now, you check  other coffee shops :
 
 In  City A , most other cafes charge  $5  too. 
 In  City B , most cafes also charge  $7   
This tells you that  higher prices are normal in City B .
Maybe  everything  costs more there—rent, wages, transportation—and  every café  has to price their coffee higher to survive.

You’re not just guessing about  one cost  (like transportation); you’re seeing the  entire market trend .

(B)  is about checking transportation costs. Helpful, but incomplete.
 (C)  is comparing prices across the  whole market , giving you a much clearer picture of whether Green Peas is  really  taking advantage or simply adjusting to market realities.

skasmani · Answer

Wouldn’t market pricing be out of scope? As the comparison is between same store of 2 cities?
I’d select B because it gives clear comparison between stores in different location hence impacting price.

Correct me if I’m wrong or the approach is not right

Bunuel · Answer

Magoosh Official Explanation:

What we want to explain are the higher prices, for the same items, in Luxville. The argument takes a firm stand: the Luxville store is just taking advantage of its location. Implicitly, the author is saying: the Luxville store has no valid reason for charging high prices. If there were a valid reason, that would call this entire argument into question.

(B) is the credited answer.  If Luxville remote, transportation to that location could be an issue, and if the additional transportation needs adds an extra cost, this would be a valid reason for charging more in the Luxville store. It would call the argument into question.

(A) is irrelevant. The comparison is between the same items in both stores, so other items, which one store has and the other doesn't have, don't affect this comparison.

(D) is a tempting answer: we already know Luxville is a wealthy enclave, so they probably spend a considerably smaller percentage of their discretionary income on groceries. It's not particular clear that know this would tell us anything we don't already know.

(C) and (E) both widen the comparison --- by comparing to other grocery franchises, or other Green Pea stores throughout the state, we probably would establish what we already suspect: the price is higher than average in the Green Peas in Luxville. The point is not merely to reinforce that but to explain it.

nikchopra · Answer

Both B and C are strong but B keeps in more in the suited range according to the argument I guess

The Green Peas Grocery Store in the remote wealthy enclave of Luxville

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The Green Peas Grocery Store in the remote wealthy enclave of Luxville

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