The retail price of decaffeinated coffee is considerably

Question

The retail price of decaffeinated coffee is considerably higher than that of regular coffee. However, the process by which coffee beans are decaffeinated is fairly simple and not very costly. Therefore, the price difference cannot be accounted for by the greater cost of providing decaffeinated coffee to consumer.

The argument relies on assuming which one of the following?

A. Process regular coffee costs more than processing decaffeinated coffee. 
B. Price differences between products can generally be accounted for by such factors as supply and demand, not by differences in production costs. 
C. There is little competition among companies that process decaffeinated coffee. 
D. Retail coffee-sellers do not expect that consumers are content to pay more for decaffeinated coffee than for regular coffee. 
E. The beans used for producing decaffeinated coffee do not cost much more before processing than the beans used for producing regular coffee.

There is no doubt about OA.

(Got this from a forum) - The book says that  D  is a weakener. Can you please explain why? In my opinion,  D has  no effect because it denies the 'possibility' (shopkeepers think) of supply-demand influencing the prices. Essentially, it's a mild strengthener - similar to those EXCEPT questions. 
Thoughts?

KarishmaB · Accepted Answer

Premises:
The retail price of decaffeinated coffee is considerably higher than that of regular coffee. 
However, the process by which coffee beans are decaffeinated is fairly simple and not very costly.

Conclusion: The price difference cannot be accounted for by the greater cost of providing decaffeinated coffee to consumer.

Understand here what the conclusion is. It is that greater cost of providing decaf coffee does not lead to the price difference. 
This means the author wants to say that there is another factor at play because of which price of decaf is high. That 'other factor' could be anything other than cost of providing decaf coffee. 
Option (b) tells you that 'supply and demand' forces set the prices, not the cost of providing the product. This strengthens the author's argument. It is one of the 'other factors'. The option is telling you that yes, there is an 'other factor' which accounts for the greater price of decaf.

Now, what could be the assumption here? What do we need to be true to say that 'cost of providing decaffeinated coffee' is not higher?
The argument already tells us that the process of decaf is simple and not expensive. But it doesn't say anything about raw material cost. When the author says 'cost of providing decaffeinated coffee', it includes both raw material and process cost. He only tells us that process cost is not high. He is assuming that the raw material cost is also not high. Only then can he say that 'cost of providing decaffeinated coffee' is not high and that some other factor is at play which sets the price of decaf coffee high.

So (E) is the assumption.

souvik101990 · Answer

Retail coffee-sellers do not expect that consumers are content to pay more for decaffeinated coffee than for regular coffee. 
I think if retailers thought consumers wont agree to pay higher prices, it would charge less for decaf
though this option is waaay out of scope.

MarkSullivan · Answer

Here's a useful trick for testing whether a statement weakens or strengthens – look at the  opposite  statement!

Sometimes the relevance of the opposite (or negation) of a statement is easier to discern. In this case, we have

( not  D) Retail coffee-sellers  do  expect that consumers are content to pay more for decaf...

Well if that's the case, then retailers can get away with charging more and it has nothing to do with the cost of decaffeinating the coffee. So, ( not  D) is definitely relevant and definitely  strengthens  the argument. It must be the case that (D) then weakens.

Hope that helps!

MarkSullivan · Answer

Follow-up note to my previous comment:

Negating a statement can sometimes be confusing and always time-consuming, so this is a technique you should only use when you are down to just a couple choices and really can't make a decision. But, in those scenarios I find it pretty useful.

Cheers,
Mark

voodoochild · Answer

Mark,
Thanks for your reply. However, I am not sure how retailers' expectation has got anything to do with the prices! For instance, a gas station could *expect* customers to pay $5K/gallon. However, that's not how the real prices are assigned. There is an economics to it. I, as a customer, could expect to pay only $0.01/gallon for the gas. What effect does it have on the gas prices? Nothing.

Am I correct?

Appreciate your thoughts.

Thanks

raghupara · Answer

OA is fine.

About D - 
Conclusion - Price difference is not due to the decaffeinating process, yet price is high.
D says - Retailers do not expect customers to pay more for this high-priced coffee. In such a case, the retailers would not be selling the decaff. coffee at a higher rate. That means, if they do not expect customers to buy decaff. coffee at such a high rate, it implies that the retailers don't perceive decaff. coffee to be so specially sold - Rather, high-pricing of decaff. coffee is unintentional and is probably a cause of the expensive decaff. process.
I cannot call this a complete weakener. The alternate cause is not clearly given in this choice. So, if its the same cause as given in the premise, it is a weakener, else, OOS.

Thanks.

Archit143 · Answer

Cannot understand why is B not a correct answer. Its defender model as far as i understand.
Retail Cost of X is higher, that does not Cost in providing will be higher.
B says Higher retail cost is because of y,z but not because of cost providing

Pls help me
Archit

plumber250 · Answer

Hi Archit,

I agree, B is a tricky one. Here is how I figured it out...

The key is in looking at what the argument actually is:

Therefore, the price difference cannot be accounted for by the greater cost of providing decaffeinated coffee to consumer.

What does this rely on?

Here is B
 
B. Price differences between products can generally be accounted for by such factors as supply and demand, not by differences in production costs.

If you look at the two bold sentences together in isolation it becomes clearer that the second one is NOT an assumption of the first. That the price difference can not be accounted for because of one factor, is not dependent on a different reason for price difference.

Hope that helps..

james

marcovg4 · Answer

Please explain why E is OA.

The fact that the beans used to produce decaf do not cost much more than the beans used to produce reg coffee is irrelevant. What is relevant is the cost of both processes, not cost of beans used in the process.

plumber250 · Answer

Hi,

I disagree with you.

If you think about producing anything, there are 2 costs that matter:
1) Raw materials
2) Cost of the process

So if we know that the process costs the same the only other thing that can affect the production cost is the raw materials.

So if we know that the raw materials (coffee beans) cost the same, then we can be sure that the production costs are equal for decaffinated and caffinated coffee.

Hope that makes sense.

james

marcovg4 · Answer

Good point James, very well said.

Posted from my mobile device

dentobizz · Answer

Bumping for review and further discussion*.
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Theory on Assumption Questions
E-gmat
inference-vs-assumption-146758.html?hilit=Inference
article-what-and-how-to-negate-6-exercise-questions-138510.html#p1119593
Souvik's article
gmatclub-verbal-attack-139074-40.html#p1125894
Kaplan
https://gmat.kaptest.com/2011/05/23/kapl ... C1289.dpbs
Veritasprep
https://www.gmatclub.com/forum/veritas-prep-resource-links-no-longer-available-399979.html#/2013/03 ... sumptions/
Knewton
https://gmatclub.com/blog/2011/08/the-de ... questions/
Mangoosh Gmat
https://magoosh.com/gmat/2013/assumption ... -the-gmat/
Manhattan Gmat
https://www.manhattangmat.com/blog/inde ... #more-6587
https://www.manhattangmat.com/articles/CR-assumption.cfm
Grockit
https://grockit.com/blog/gmat/2011/06/20 ... sumptions/
Gmatpill
https://www.gmatpill.com/practice-questi ... -question/
Gogmat
https://gogmat.com/blog/19-gmat-sample-q ... tion.html#.

Ella02 · Answer

Quit tricky but I say E, because the conclusion is that the d. Coffee does not Cost more and the premise is that the process is not much more expensive. So the assumption is that everything involving d. Coffee does not cost much more than regular coffee

rohitd80 · Answer

Hi Karishma,

Thanks for the most lucid, terse and understandable explanation on this CR question!

One additional question: 
B & E are both assumptions...So the best justification to select E over B is that E is more relevant and makes sense (base on cost to provide to coonsumer = raw material + process costs respectively... And that B, although an assumption, but is more far fetched than E? In other words, if E was not provided and was replaced by another completely irrelevant answer choice, B would've been the number one choice?

Thanks!

KarishmaB · Answer

No, (B) is not an assumption. It is a strengthener.
Note the difference between an assumption and a strengthener. An assumption is a special type of strengthener. It makes the argument stronger and is also necessary for the argument to be true. 
Any random strengthener is not necessary for the argument to be true. An assumption, if negated makes it impossible for the conclusion to hold.

You need (E) to be true for the argument to hold. If it weren't and if the raw material cost in case of decaffeinated coffee was much higher, the author's argument would fail. Read the argument again after assuming that raw material for decaffeinated coffee is much higher. The argument makes no sense now.

On the other hand, (B) is not necessary. The other factor could be supply demand but it could be something else as well. It is not necessary that supply demand should set the price for our argument to hold. The argument only says that there is some other factor. It could as well be something else. Read the argument after assuming that supply demand does not set the price. Can the argument still hold? Sure. Something else could set the price.

Hence, in any case, (B) will not be the answer.

kornn · Answer

Dear AjiteshArun , Q1. Does choice A. strengthen the conclusion? A. Process regular coffee costs more than processing decaffeinated coffee. If the cost of processing of decaf. is low, then the more reason to believe that the cost of providing decaf. is low. Hence, we believe more in the conclusion that the higher price of decaf. is NOT because of the cost of providing decaf. Is this reasoning correct? Dear VeritasKarishma VeritasPrepBrian AnthonyRitz , Q2. How does choice A. undermine the conclusion? The official solution in the book says: Answer choice "A" actually undermines the conclusion. (Remember to be cautious about Weaken answers for Strengthen questions!) I don't get the logic behind it. Thank you in advance!

AnthonyRitz · Answer

Varotkorn,

I can't speak to what the solution in the official book says (I didn't write it and don't have it in front of me at this moment), but here's my take:

The conclusion is about why decaffeinated coffee has a higher retail price. If processing regular coffee costs more than processing decaffeinated coffee, then it seems even less likely that the cost of providing decaffeinated coffee can explain its higher price -- after all, one part of providing coffee is processing it, and we just found out that the processing actually costs more for regular coffee, and therefore that this *part* of the cost of providing coffee is definitely not leading to the higher price for decaffeinated coffee.

The conclusion is "the price difference cannot be accounted for by the greater cost of providing decaffeinated coffee to consumer." So A is a slight strengthener if true. But this doesn't actually matter...

Because the right answer to an assumption question is neither something that strengthens nor something that weakens. It's something that's *necessary.* And to know if something is truly necessary, you have to try to live without it. What happens then? If you try to live without it and you die, then, whoops, I guess it was necessary. So in assumption questions, like this one, we have to negate an answer to check it.

Now, if you negate A, then "Processing regular coffee does not cost more than processing decaffeinated coffee." But of course we know that processing decaffeinated coffee is cheap, so this is maybe a slight weakener but mostly just kind of a wash -- the processing is cheap either way, and the processing therefore can't be the source of the "considerably higher" cost of decaffeinated coffee... but we already knew that. So negating this answer doesn't really add much of anything and certainly doesn't destroy the conclusion that "the price difference cannot be accounted for by the greater cost of providing decaffeinated coffee to consumer." Since A isn't necessary, it's wrong.

Does that make sense?

The real thing to focus on here, in my view, is the wording gap. They switched, you see, from talking about the cost of "the process of decaffeinating" coffee in the premise to the cost of "providing" the coffee in the conclusion. Could there be more to the cost of "providing" decaffeinated coffee than just the cost of "decaffeinating" it? That's what we're looking for, and, frankly, A just doesn't provide this.

But E *does* provide this. If getting the beans needed for decaffeinated coffee costs more in the first place (and this is certainly part of "providing" decaffeinated coffee), then it seems like the cost of providing decaffeinated coffee *does* account for the higher retail price of decaffeinated coffee, after all. Negating E has destroyed my conclusion that the cost of providing is not the cause. So E is necessary, and thus E is correct.

I hope this helps!

KarishmaB · Answer

Premises:
The retail price of decaffeinated coffee is considerably higher than that of regular coffee. 
However, the process by which coffee beans are decaffeinated is fairly simple and not very costly.

Conclusion: The price difference cannot be accounted for by the greater cost of providing decaffeinated coffee to consumer.

Cost of providing coffee = Cost of beans + Cost of processing

The premises tell us that cost of processing is not expensive and it goes on to conclude about cost of providing coffee. So an assumption is made about the cost of beans. That their cost is not much higher than cost of regular beans. Hence our assumption is (E).

As for (A): Processing regular coffee costs more than processing decaffeinated coffee.

The argument already tells us that processing decaffeinated coffee is not very costly ( which seems to say that it might be more expensive than processing regular coffee but not much). Option (A) says that processing regular coffee costs more. It doesn't seem to make much sense with our argument and that is what is meant by undermines the argument in the explanation. You get to know that (A) is not an assumption and that is what is important.

kornn · Answer

Dear  VeritasKarishma ,

By the way taking choice A. at face value, it strengthens the argument as AnthonyRitz suggested above right -  A is a slight strengthener if true. ?

Thank you for resolving the paradox!

The retail price of decaffeinated coffee is considerably

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The retail price of decaffeinated coffee is considerably

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