apoorv601 wrote:
The owners of a book store and a nearby coffee shop have decided to combine their businesses. Both owners believe that this merger will increase the number of customers and therefore the gross revenue, because customers who come for one reason may also decide to purchase something else.
Which of the following, if true, most weakens the owners' conclusion that a merger will increase revenue?
(A) Books and drinks can both be considered impulse purchases; often, they are purchased by customers without forethought.
(B) Profit margins at a coffee shop are generally significantly higher than profit margins at a book store.
(C) People who are able to read the first chapter of a book before buying are more likely to decide to buy the book.
(D) A large majority of the book store's current customer base already frequents the coffee shop.
(E) A combination book store and coffee shop that opened in a neighboring city last year has already earned higher than expected profits.
Summary: bookstore and coffee shop are going to combine their businesses with the belief that this merger will increase the number of customers and therefore increase revenue since customers who come for one reason might purchase something else.
We are looking for an answer that would mean revenue will not increase.
(A) Books and drinks can both be considered impulse purchases; often, they are purchased by customers without forethought.
eliminate- this isn't relevant to why revenue will or will not increase
(B) Profit margins at a coffee shop are generally significantly higher than profit margins at a book store.
eliminate- the statement is comparing the bookstore to coffeeshop profit margins
(C) People who are able to read the first chapter of a book before buying are more likely to decide to buy the book.
eliminate- out of scope
(D) A large majority of the book store's current customer base already frequents the coffee shop.
Keep- this gives a reason why revenue will not increase with the merger of these two businesses.
(E) A combination book store and coffee shop that opened in a neighboring city last year has already earned higher than expected profits
eliminate-this strengthens the argument rather than weakens it.