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# The value of a product is determined by the ratio of its

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The value of a product is determined by the ratio of its [#permalink]

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17 Dec 2005, 12:41
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The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.
Which of the following, if true, would most strengthen the conclusion drawn above?
(A) It is possible to increase both the quality and the price of a product without changing its competitive position.
(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands.
(C) Competing products often try to appeal to different segments of the population of consumers.
(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty.
(E) Consumersâ€™ perceptions of the quality of a product are based on the actual quality of the product.
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17 Dec 2005, 13:06
The higher the ratio of Q/P = higher value = consumer will select that product

(A) It is possible to increase both the quality and the price of a product without changing its competitive position. ==> If price increased more than the quality, the value will be lower and consumer will not select the product

(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands. ==> out of scope

(C) Competing products often try to appeal to different segments of the population of consumers. ==> Out of scope

(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty. ==> Weaken the argument because the equation is either Q increase or P decrease

(E) Consumersâ€™ perceptions of the quality of a product are based on the actual quality of the product. ==> Correct! If actual Q increases and consumers agree with the increase, consumers will likely select that product
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17 Dec 2005, 22:10
E.

Key assumptions:

No other factors rathen than value of the product affect likelihood that consumers will choose company's product over its competitors'.

Products' value correspons to the actual quality.

D undermines the key assumption

A,B,C don't affect the argument

E fill in the key assumption
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18 Dec 2005, 07:47
All except E are aout of scope. E must be the answer.
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19 Dec 2005, 04:32
OA is E.
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19 Dec 2005, 09:53
Got E as well.
19 Dec 2005, 09:53
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