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# The Plexis Corporation, a leading computer chip manufacturer, is curre

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Director
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30 Sep 2011, 06:37
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The Plexis Corporation, a leading computer chip manufacturer, is currently developing a new chip, which is faster and more efﬁcient than any computer chip currently in use. The new chip will be released for sale in twelve months. Plexis’ market research has shown that initial sales of the new chip would be maximized by starting to advertise it now, but the company has decided to wait another six months before doing so.

Which of the following, if true, provides the Plexis Corporation with the best reason for postponing advertising its new chip?

(A) Some computer users are reluctant to purchase new computer products when they are ﬁrst released.

(B) The cost of an advertising campaign capable of maximizing initial sales of the new chip would be no greater than campaigns previously undertaken by Plexis.

(C) Advertising the new chip now will signiﬁcantly decrease sales of Plexis’ current line of computer chips.

(D) Plexis’ major rivals in the computer chip manufacturing business are developing a chip with capabilities that are comparable to those of Plexis’ new chip.

(E) Taking full advantage of the capacities of the new chip will require substantial adjustments in other segments of the computer industry

[Reveal] Spoiler:
I got the question right. However, I would like to hear your thoughts on why (E) is wrong. My reasoning with (E) goes like this:

The Plexis corp. is waiting for major changes in other segments of the computer industry that are expected in 6 months. For example, the new chip might have a feature that is not supported by current motherboards. But new motherboards will be announced in 6 months. So the Plexis Corp. decided to wait for that announcement. Had they decided not to wait, it would be useless to market the chip (because, as I have said, the new feature is yet to be supported by motherboards), and the advertisement campaign would result in wasted money.

Any thoughts?
[Reveal] Spoiler: OA

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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30 Sep 2011, 06:50
Here is my opinion -
E does not say when the substantial changes are going to take place. For all we know it might take 2 years.

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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30 Sep 2011, 18:56

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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01 Oct 2011, 08:17
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We are said in the premises that sales of the new chip will be maximized by early advertisement. Even if (E) tells us that it will take time for the computer industry to accomodate, this still will not influence our sales since the initial premises is a FACT. So, no matter what there will be in the industry, if (E) is true, then it is still more profitable to begin advertisment right now, hence (E) is not the right answer.
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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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02 Oct 2011, 09:33
bagrettin, you are right. That's exactly the reason why E is incorrect. Thanks.

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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02 Oct 2011, 10:09
E seems redundant here. So i have chosen C

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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03 Sep 2012, 23:23
E strengthens the premise, not a weakener, because if it does start to advertise now, then the chip peripherals would have better opportunity to make the adjustments, which in turn will help the chip sell more, so IMO C is the correct choice and not E

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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04 Sep 2012, 09:43
This is the most convincing reason for the company to wait another six months.
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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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17 Sep 2013, 00:55
(D) Plexis’ major rivals in the computer chip
manufacturing business are developing a chip
with capabilities that are comparable to those of
Plexis’ new chip.

This was tricky...
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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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30 Jun 2016, 13:54
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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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08 Jul 2016, 05:21
nonameee wrote:
The Plexis Corporation, a leading computer chip
manufacturer, is currently developing a new chip,
which is faster and more efﬁcient than any computer
chip currently in use. The new chip will be released for
sale in twelve months. Plexis’ market research has
shown that initial sales of the new chip would be
maximized by starting to advertise it now, but the
company has decided to wait another six months
before doing so.
Which of the following, if true, provides the Plexis
Corporation with the best reason for postponing

(A) Some computer users are reluctant to purchase
new computer products when they are ﬁ rst
released.
(B) The cost of an advertising campaign capable of
maximizing initial sales of the new chip would be
no greater than campaigns previously
undertaken by Plexis.
(C) Advertising the new chip now will signiﬁ cantly
decrease sales of Plexis’ current line of
computer chips.
(D) Plexis’ major rivals in the computer chip
manufacturing business are developing a chip
with capabilities that are comparable to those of
Plexis’ new chip.
(E) Taking full advantage of the capacities of the
new chip will require substantial adjustments in
other segments of the computer industry

I got the question right. However, I would like to hear your thoughts on why (E) is wrong. My reasoning with (E) goes like this:

The Plexis corp. is waiting for major changes in other segments of the computer industry that are expected in 6 months. For example, the new chip might have a feature that is not supported by current motherboards. But new motherboards will be announced in 6 months. So the Plexis Corp. decided to wait for that announcement. Had they decided not to wait, it would be useless to market the chip (because, as I have said, the new feature is yet to be supported by motherboards), and the advertisement campaign would result in wasted money.

Any thoughts?

The OA is a slightly better choice.

Hi,

E is saying : adjustment requires time. So this is actually weakening the argument that News should be released late. If E was true, they would want other accessories to be compatible when they release it. So they would give maximum time and release the news about the chip now rather than 6 months later to give other manufacturers ample time to adjust.
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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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08 Jul 2017, 19:26
Can anyone explain why D is wrong.

The stimulus presents that initial sales of New Chips will be maximized if they start the advertising 12 months in advance. However Plexis decides to wait for 6 months. We have to find the best reason why plexis has postponed the advertising.

Choice D: could this be the reasoning: If Plexis started advertising 12 months before the date of release than the rivals will update their product with similar features that will make their product more competitive with plexis. Ultimately that will hurt the initial sales of new chips.

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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23 Jul 2017, 00:42
Hi mikemcgarry , need your insights here.

I narrowed down to answer choices C and D in this question, and my reasoning to choose D is same as the one posted by Rocket7 above. Could you please help me understand how C is a better choice than D.

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre [#permalink]

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24 Jul 2017, 11:48
Rocket7 wrote:
Can anyone explain why D is wrong.

The stimulus presents that initial sales of New Chips will be maximized if they start the advertising 12 months in advance. However Plexis decides to wait for 6 months. We have to find the best reason why plexis has postponed the advertising.

Choice D: could this be the reasoning: If Plexis started advertising 12 months before the date of release than the rivals will update their product with similar features that will make their product more competitive with plexis. Ultimately that will hurt the initial sales of new chips.

shoumkrish wrote:
Hi mikemcgarry , need your insights here.

I narrowed down to answer choices C and D in this question, and my reasoning to choose D is same as the one posted by Rocket7 above. Could you please help me understand how C is a better choice than D.

Dear Rocket7 & shoumkrish,

I'm happy to respond.

Here's the prompt:
The Plexis Corporation, a leading computer chip manufacturer, is currently developing a new chip, which is faster and more efﬁcient than any computer chip currently in use. The new chip will be released for sale in twelve months. Plexis’ market research has shown that initial sales of the new chip would be maximized by starting to advertise it now, but the company has decided to wait another six months before doing so.

Which of the following, if true, provides the Plexis Corporation with the best reason for postponing advertising its new chip?

We know that the new chip will be faster & more efficient than anything currently available. It will be ready in 12 months.

(C) Advertising the new chip now will significantly decrease sales of Plexis’ current line of computer chips.
Suppose this is 100% true. Then we know for sure that Plexis will lose money now. This is a clear and unambiguous reason not to advertise now.

(D) Plexis’ major rivals in the computer chip manufacturing business are developing a chip with capabilities that are comparable to those of Plexis’ new chip.
Suppose this is 100% true. What do we know? When will these other manufacturers start to advertise? We don't know. When will these competing product be release for sale? before or after 12 months from now? We don't know. If these other manufacturers found out about Plexis' new chip, what would their response be? Would they be able to mimic what is great about the Plexis chip? We don't know.
There's a ton that we don't know about (D). Yes, we could imagine some scenarios in which this also would be a clear reason to delay the advertising, but other readings don't support that conclusion. This is vague and suggestive, leaving a lot of room in which we can read things--highly characteristic of GMAT CR trap answers! This is not a tight clear unambiguous answer. Choice (C) is a much much stronger answer.

That was part of my analysis. I will also say, Rocket7 & shoumkrish, it would be an exceptionally good idea if you read the business tech news regularly. Designing a computer chip is not like designing, say, a T-shirt: it's not as if we can add new features more or less on a whim. The kind of breakthrough that leads to a faster and more efficient chip is a major R&D achievement requiring sophisticated science and engineering. Simply the non-technical general information that would appear in an ad, say, the information that the new Plexis chip can operate at XX speed, would give any competitor zero information about how Plexis was able to achieve this breakthrough. Once the Plexis chips are for sale and the R&D departments of competitors can buy the chips and analyze them, then that's the point at which copy-cat efforts might begin.

Students often vastly underestimate the importance of real world considerations in GMAT CR. See this blog:
GMAT Critical Reasoning and Outside Knowledge

Does all this make sense?
Mike
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Magoosh Test Prep

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Re: The Plexis Corporation, a leading computer chip manufacturer, is curre   [#permalink] 24 Jul 2017, 11:48
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