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

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

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19 Jan 2010, 09:27
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Project CR Butler:Day 42:Critical Reasoning (CR1)

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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) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.

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19 Jan 2010, 20:33
2
SudiptoGmat 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) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.

Has to be E. The potential buyers of the product have to know the quality of the product to determine the value of the product (value = quality/price).
Manager
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11 Aug 2010, 01:15
E????? How does it strengthen???
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11 Aug 2010, 02:34
Ne one please explain why E . Though i Chose A
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11 Aug 2010, 02:51
There are two sides of the deal. Producer and customer.

Producer plays with quality & price, so that the product has the best competitive position.

Consumer bases the decision to buy on quality and price perception.

You need some link to connect these two statements. (E) perfectly connects actual quality, set by producer, with its perception by customer.
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11 Aug 2010, 04:10
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Yes, this should be E. Part of the stem says, paraphrasing: "if you can increase the quality of a product, consumers will be more likely to buy it". Well, it's not enough to make the product better - consumers need to *know* the product is better. That's what E is saying.
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Re: The value of a product is determined by the ratio of its  [#permalink]

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11 Aug 2010, 09:54
Has to be E, rest are either weakening the argument or not at all important
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08 Sep 2010, 06:03
imo E, A doesnt strengthen or weaken the position
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08 Sep 2010, 11:24
E is the only Answer..It has to be E
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14 Sep 2010, 08:30
Here's my justification for E.

(A) It is possible to increase both the quality and the price of a product without changing its competitive position. - The conclusion states you either increase the quality or lower the price, not both. Although you can change both, it's out of scope for the purposes of the conclusion

(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands. - This could weaken the conclusion. If some consumers make purchasing decisions purely on higher price then lowering the price will decrease the likelihood of some consumers selecting the product.

(C) Competing products often try to appeal to different segments of the population of consumers. - This is irrelevant to the conclusion. We're not talking about price or quality in this answer.

(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty. - This weakens the conclusion. If other factors affect the competitive position then increasing the quality or decreasing the price could have no effect.

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product. - Correct answer. An assumption in the argument is the increase in quality is actually observed and noticed by the consumer. This validates the assumption and therefore strengthens the argument.
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Re: The value of a product is determined by the ratio of its  [#permalink]

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09 Apr 2012, 02:29
shrouded1 wrote:
imo E, A doesnt strengthen or weaken the position

Bang on! it just at best partailly strengthen, whereas consider the case when consumer is not able to understand/feel the better quality then there is no point in improving quality. So E wins IMO for being more direct!
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17 Dec 2018, 10:44
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.

the key part is in red.

say consumers give rating 7 out of 10 to quality of some product. So either quality rating should be increased or the price of this product decreased

Hence, consumers’ perceptions of the quality of a product are based on the actual quality of the product.

hence E is clear winner.

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.
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01 Jan 2019, 13:21
SudiptoGmat wrote:

Project CR Butler:Day 42:Critical Reasoning (CR1)

For all CR butler Questions Click Here

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) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.

My reasoning is as follows:

V = Q/P, increase V means increase in competitive position. thus we must increase Q or lower P. Pre-thinking here would be along the lines of if we increase Q we can keep P the same or vice versa.

A) This actually weakens the conclusion. If it's unchanged that means the conclusion falls apart.
B) Irrelevant, in our conclusion we're talking about the entire population not certain segements
C) Ireelevant to our conclusion
D) Irrelevant again because we only care about Price to Value
E) CORRECT, although this wasn't what we though in our pre-think, it makes a lot of sense. If we said the quality of a product is subjective, then the entire conclusion would fall apart since we won't be able to accurately get a product's true value.
Re: The value of a product is determined by the ratio of its   [#permalink] 01 Jan 2019, 13:21
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