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

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

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25 Jul 2006, 20:31
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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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Re: CR --- Product Quality [#permalink]

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25 Jul 2006, 20:39
mailtheguru wrote:
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.

A - Ok no support tough
B-out of scope
C -weakens
D - Weakens
E-correct - perceived quality has to be same as actual quality otherwise consumers will have a different standard of measure.

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25 Jul 2006, 21:33
Will go with E.

A and E are the only valid ones.

But A doesnot support the conclusion as strongly as E does.

The passage mentions that increasing the quality will help improve the competitive position.
Given the fact that consumers percieve the quality of a product based on the actual quality, improving the quality will help.

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25 Jul 2006, 22:36
I will go with A.

if the quality or price can be changed without affecting the competitive position, then the consumer will be more likely to buy the product.

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26 Jul 2006, 01:05
IMO A is correct.
If it is posible to increase both the price and the quality of the product without changing its competitive position, then if we have change in one of the parameters then the competitive position will be changed.
So A

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Re: CR --- Product Quality [#permalink]

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26 Jul 2006, 05:57
mailtheguru wrote:
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.

You could increase the value of a prodict by either lowering the price or increasing quality. A talks about increasing both- it could still add value but perhaps not enough for consumers to buy it at the increased price.

However, if you increase the quality of a product which is in line with the consumers perception (while keeping the price unchanged or at a lower price) then it is bound to add value. therefore, choose E. Hope I'm on the right track here.

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26 Jul 2006, 09:01
IMHO, A is incorrect, because the statement may or may not be true....

first of all... how do you judge the quality and increase it by the same amount as price, so ratio stays the same?

second, if you increase the quality and price, then statement may or may not be true, meaning that you would have to increase the quality and price by the same amount so that ratio of value itself doesn't change... as it is stated in A

on the only issue from this seems like... how do you judge the quality, which is answered in E

(B) certain segments... don't need to read further... we care about all consumers
(C) again same as B
(D) completely out of scope

hope this helps and makes sense

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26 Jul 2006, 09:41
E by PoE. Between A and E, A seems to be a side-effect, rather than a supporting argument.

However, I did not exactly like the choice E either... IMHO it does not exactly support the conclusion - however, it is the choice that has the least reasons to be eliminated thru PoE...
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Re: CR --- Product Quality [#permalink]

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26 Jul 2006, 10:02
IMHO, E is right because, if, as E states, the consumers' perceptions is indeed basedon the actual quality of the product, then the consumers would be able to perceive the increased Value (as a result of increasing quality as stated in the stem) quite easily and convincingly - in other words, the customers will be easily able to see the effects of increasing the Value of the product..

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26 Jul 2006, 10:56
By Using POE, I see E is the better answer.

A seems to be not adding value based on ratio factor
B talks about some portion of group
C weakens
D out of topic

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26 Jul 2006, 12:43
Hmmm....I seem to disagree with the analysis of points B and C mentioned by u2lover:
----
(B) certain segments... don't need to read further... we care about all consumers
(C) again same as B
(D) completely out of scope
----
If you read further, it is "different segments of the population of consumers" - so here we are in fact talking about the consumer population only...

I do not know whether i am on thinking on the same lines as you guys, but consider this explanation:

I choose C.
Since "Competing products.....try to appeal to different segments of the population of consumers" may suggest that the product would come under 2 sections of consumers....
- one type who would be willing to pay any price for high quality (1st part of argument satisfied) say for e.g. the rich ppl
- and one type who would be interested in lower prices of the product not caring about the quality as such. (2nd part of argument satisfied) say for e.g. the poor ppl...

Thus, in both the cases Higher quality and Lower prices makes the consumer select the product by making the product a hit in different segments.

What say guys?? Is it correct reasoning...or am I missing some point here???
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26 Jul 2006, 13:03
jitu_ch wrote:
Hmmm....I seem to disagree with the analysis of points B and C mentioned by u2lover:
----
(B) certain segments... don't need to read further... we care about all consumers
(C) again same as B
(D) completely out of scope
----
If you read further, it is "different segments of the population of consumers" - so here we are in fact talking about the consumer population only...

I do not know whether i am on thinking on the same lines as you guys, but consider this explanation:

I choose C.
Since "Competing products.....try to appeal to different segments of the population of consumers" may suggest that the product would come under 2 sections of consumers....
- one type who would be willing to pay any price for high quality (1st part of argument satisfied) say for e.g. the rich ppl
- and one type who would be interested in lower prices of the product not caring about the quality as such. (2nd part of argument satisfied) say for e.g. the poor ppl...

Thus, in both the cases Higher quality and Lower prices makes the consumer select the product by making the product a hit in different segments.

What say guys?? Is it correct reasoning...or am I missing some point here???

you may disagree all you want with me... this is why we have discussions

to your point and my reasoning why C is out of scope you must understand what is the boundary of the argument... which is we are talking about ALL consumers... any given one has got to fit into this category...

now, you are saying some segments do X, others prefer Y... RED FLAG... we are talking about all of them as a whole, we can't separate them on our own, because the argument never said we could!!! #1 mistake on CR is assuming something new or bring new info about the argument... unless the question asks you to do so (strengthen/weaken) you should never use your knowledge or add. info

I am not trying to attack, just have a strong comprehension why C is wrong. hope this helps you

suggestions/questions welcome

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26 Jul 2006, 22:45
E, as rightly mentioned by Jaynayak.

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26 Jul 2006, 22:49
one more E here..
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27 Jul 2006, 02:33
I agree with E I do not like it much but is the best pick
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27 Jul 2006, 03:11
Iam also for E.
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27 Jul 2006, 08:16
OA is E.

I think old_dream_1976's explanation makes a lot of sense. The theoritical quality of a product need not match the perception of the customers. Making it explicit strengthens the argument.

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10 Oct 2006, 09:58
Seven countries signed a treaty binding each of them to perform specified actions on a certain fixed date, with the actions of each conditional on simultaneous action taken by the other countries. Each country was also to notify the six other countries when it had completed its action.
The simultaneous-action provision of the treaty leaves open the possibility that
(A) the compliance date was subject to postponement, according to the terms of the treaty
(B) one of the countries might not be required to make any changes or take any steps in order to comply with the treaty, whereas all the other countries are so required
(C) each country might have a well-founded excuse, based on the provision, for its own lack of compliance
(D) the treaty specified that the signal for one of the countries to initiate action was notification by the other countries that they had completed action
(E) there was ambiguity with respect to the date after which all actions contemplated in the treaty are to be complete

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10 Oct 2006, 10:43
C...?

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11 Oct 2006, 18:29
E by POE

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11 Oct 2006, 18:29

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