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# Till last year in the country of Scavengia, a nation with falling

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General GMAT Forum Moderator
Joined: 29 Jan 2015
Posts: 1170
Location: India
WE: General Management (Non-Profit and Government)
Till last year in the country of Scavengia, a nation with falling  [#permalink]

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23 Sep 2017, 00:40
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75% (hard)

Question Stats:

56% (02:17) correct 44% (02:25) wrong based on 327 sessions

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Till last year in the country of Scavengia, a nation with falling birth rates, every 5% rise in condom prices has decreased per capita sales of condoms by five percent. Scavengia is about to raise taxes on condoms by 5 cents per pack. The average price of condoms in Scavengia is and has been for more than a year 50 cents per pack. So the tax hike stands an excellent chance of reducing per capita sales of condoms by five percent.

Which of the following is an assumption on which the argument depends?

A. Any decrease in per capita sales of condoms in Scavengia will result mainly from an increase in the number of people who are past the reproductive age.
B. At present, the price of a pack of condoms in Scavengia includes taxes that amount to less than ten percent of the total selling price.
C. Condom companies are unlikely to reduce their profit per pack of condoms to avoid an increase in the cost per pack to consumers in Scavengia.
D. The number of people in Scavengia who use condoms has remained relatively constant for the past several years.
E. Previous increases in condom prices in Scavengia have generally been due to increases in taxes on condoms.

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Joined: 27 Nov 2016
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Re: Till last year in the country of Scavengia, a nation with falling  [#permalink]

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22 Dec 2017, 07:15
Hello Experts,

Can you please provide a reason why the OA is C?
Intern
Joined: 10 Oct 2017
Posts: 6
Re: Till last year in the country of Scavengia, a nation with falling  [#permalink]

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05 Jan 2018, 13:44
i was confused between C and D but i guess per capita means per head. so the population changing or remaining constant should not matter. hence eliminated D
Manager
Joined: 20 Feb 2017
Posts: 88
Location: United States
Re: Till last year in the country of Scavengia, a nation with falling  [#permalink]

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05 Jan 2018, 16:14
1
rohan2345 wrote:
Till last year in the country of Scavengia, a nation with falling birth rates, every 5% rise in condom prices has decreased per capita sales of condoms by five percent. Scavengia is about to raise taxes on condoms by 5 cents per pack. The average price of condoms in Scavengia is and has been for more than a year 50 cents per pack. So the tax hike stands an excellent chance of reducing per capita sales of condoms by five percent.

Which of the following is an assumption on which the argument depends?

A. Any decrease in per capita sales of condoms in Scavengia will result mainly from an increase in the number of people who are past the reproductive age.
B. At present, the price of a pack of condoms in Scavengia includes taxes that amount to less than ten percent of the total selling price.
C. Condom companies are unlikely to reduce their profit per pack of condoms to avoid an increase in the cost per pack to consumers in Scavengia.
D. The number of people in Scavengia who use condoms has remained relatively constant for the past several years.
E. Previous increases in condom prices in Scavengia have generally been due to increases in taxes on condoms.

In Stem, it says that tax hike will result in increased condom prices and in turn, reduced per capita condom sales.

Option A - No mention of age - so out of scope
Option B - Not relevant as we are talking about increase in tax on top of existing cost - Eliminate
Option C - Correct answer. If tax hike doesn't result in increased cost, given argument is no more valid.
Option D - Stem talks about per capita usages so nothing to do with the number of people using condoms. No information about cost and usage trends provided.
Option E - This statement doesn't add any relevant information except saying that condom companies haven't increased cost without tax hikes.
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Joined: 07 May 2018
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Re: Till last year in the country of Scavengia, a nation with falling  [#permalink]

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17 Aug 2018, 10:14
1
Hi!
We are supposed to find an assumption
So, we break the question then,
Current average price of a pack of condoms is 50 cents and after new tax it should rise to 55 cents
Average price per pack= Current Manufactures's Price(45 cents)+ Tax(5cents)
We are given that the hike in the price of packet because of tax will lead to decreased sales, so what if Current Manufactures's Price goes down by 5 cents then there will be no overall effect on the end consumer price, so we have to assume that the current manufacturer's price does not go down.

Thanks.
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Re: Till last year in the country of Scavengia, a nation with falling   [#permalink] 17 Aug 2018, 10:14
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