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To increase overall profits, an automobile dealership raised sticker p

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To increase overall profits, an automobile dealership raised sticker p  [#permalink]

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New post 28 Aug 2019, 11:23
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Question Stats:

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To increase overall profits, an automobile dealership raised sticker prices by 20 percent on all of the truck models it sells, but did not raise prices on any other type of vehicle. The owner of the automobile dealership claims that this tactic alone was sufficient to increase profits, as overall revenue has almost doubled since truck prices were increased.

Which of the following, if true, most effectively weakens the owner's claim?

A. The number of other vehicle types sold did not increase.

B. The percentage of trucks sold increased after prices were raised.

C. The overall profits from all vehicles sold since prices were raised have increased.

D. The number of customers buying cars from the automobile dealership increased when the only other car dealership moved to another part of town.

E. The cost of running the dealership has more than doubled since the price increase, and the number of trucks sold has increased

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Re: To increase overall profits, an automobile dealership raised sticker p  [#permalink]

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New post 16 Sep 2019, 02:09
SajjadAhmad wrote:
To increase overall profits, an automobile dealership raised sticker prices by 20 percent on all of the truck models it sells, but did not raise prices on any other type of vehicle. The owner of the automobile dealership claims that this tactic alone was sufficient to increase profits, as overall revenue has almost doubled since truck prices were increased.

Which of the following, if true, most effectively weakens the owner's claim?

A. The number of other vehicle types sold did not increase.

B. The percentage of trucks sold increased after prices were raised.

C. The overall profits from all vehicles sold since prices were raised have increased.

D. The number of customers buying cars from the automobile dealership increased when the only other car dealership moved to another part of town.

E. The cost of running the dealership has more than doubled since the price increase, and the number of trucks sold has increased


Weakener : Shows different reason than tactic for revenue increase

1. Total revenue got increased, even if revenue increase due to trucks sale, the conclusion stands
2. Doesn't do anything(why is important)
3. same as 2
4. Correct. Revenue increased because it is now the only dealership in town and not because of the tactic.
5. Revenue got increased, not profit. Even then it could still be because of the tactic
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Re: To increase overall profits, an automobile dealership raised sticker p  [#permalink]

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New post 18 Sep 2019, 02:44
An alternate reason is needed to state the increase in the profits. Please note that our objective to weaken the argument is not to show that profits were less but show that an alternate phenomenon(probably another segment apart from trucks) caused the profits to rise and not the increase in sticker prices of trucks. Answer choice D is based on the same approach.

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Re: To increase overall profits, an automobile dealership raised sticker p  [#permalink]

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New post 18 Sep 2019, 06:35
Context:
To weaken the argument, we must find an answer which, either
--> provides for the fall in quantity of trucks sold, yet justify the increase in price, or
--> provides any other reason for increase in total revenue (apart from the rise in quantity sold for trucks).


A. The number of other vehicle types sold did not increase. - (S) if the number of other vehicles sold did not increase, implies the increase in total quantity is because of increase in number of trucks sold.

B. The percentage of trucks sold increased after prices were raised. - (S) Exactly the opposite of what we want, doesn't weaken

C. The overall profits from all vehicles sold since prices were raised have increased. (-) Doesn't justify the fall in quantity sold of trucks

D. The number of customers buying cars from the automobile dealership increased when the only other car dealership moved to another part of town. (W) Does the job. Explains the second scenario we discussed in the context [provides any other reason for increase in total revenue (apart from the rise in quantity sold for trucks)]. Correct Answer.

E. The cost of running the dealership has more than doubled since the price increase, and the number of trucks sold has increased (-) Irrelevant.
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Re: To increase overall profits, an automobile dealership raised sticker p   [#permalink] 18 Sep 2019, 06:35
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