Over an eleven-month period, during which national retail computer sal

Question

Over an eleven-month period, during which national retail computer sales remained stable at 400,000 units per month, sales by the Friendly Computer Stores chain rose 200 percent, increasing the chain’s share of the total market to 7 percent. Other retail stores tried, without success, to attract customers away from the Friendly chain. Then regulation X was imposed on all computer retailers by the federal government. In the ensuing months, Friendly’s total share of the market fell to 4 percent, even though its monthly sales volume remained at the same level it had reached just prior to the enactment of regulation X.

Each of the following, in conjunction with the information presented above, could be true EXCEPT:

(A) All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X.

(B) All other computer companies lost some market share during the four-month period prior to the enactment of regulation X.

(C) The enactment of regulation X provided the Friendly chain’s competitors with an advantage they did not previously have.

(D) The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share.

(E) In the period following the enactment of regulation X, many new computer retailers that specialized in low-budget computers entered the marketplace.

AbhayPrasanna · Accepted Answer

11 month period. National sales is 400,000 units per month. 
For the FCS chain, sales rose 200%, increasing its market share to 7%.

After regulation X:
FCS market share down to 4% BUT monthly sales volume remained the same as it was at the end of the 11 month period.

Which of the following CANNOT be true?

A. This cannot be true. Consider this: At the end of 11 month period, FCS had sales of 700, which was 7% of the entire market sales of 10,000. In ensuing months, FCS still sold 700, but this represents only 4% of the new market (=17,500), which must have obviously increased. If all other retailers experienced a DROP in the sales, how can the market increase, and thus the same amount of sales of FCS account for a lesser percentage of the market?!

I disagree with the OA, and am almost certain this is the answer.

B. This could be true, this is the 4 month period before regulation X, so there could have been fluctuations in that time, since we only know the net results of that 11 month period.

C. This could be true, and explains why the the other retailers experienced an increase in sales, and thus increasing the market relative to FCS's constant sales.

D. Other market force changes caused the market share decline - not some advantage that other people had over FCS. This is perfectly possible. What if regulation X caused some other changes in the market that explains FCS's constant sales but reduced market share? What if regulation X has nothing to do with what happened - perhaps some other event caused it.

E. This is perfectly possible and actually explains the increase in the market.

Pick A.

Please give Source and Original explanation if possible.

chetan2u · Answer

hi Prakhar,
yes the OA given there is D, where as there too I have written a post that clearly A is the answer..
I am reproducing my post here--

Hi,
just saw the TAG, if you use  name , the member is informed..

lets see the Q and work out each sentence so that we can eliminate choices straight way..
1) Over an eleven-month period, during which national retail computer sales remained stable at 400,000 units per month, sales by the Friendly Computer Stores chain rose 200 percent, increasing the chain’s share of the total market to 7 percent..
 -- the sales were stable overall
-- FCS chain increased its sales by 100%, and it resulted in 7% of TOTAL 
  Inference-- If FCS has increased its sales with the total sales stable, Few would have seen decreased sales

2)Then regulation X was imposed on all computer retailers by the federal government. In the ensuing months, Friendly’s total share of the market fell to 4 percent, even though its monthly sales volume remained at the same level it had reached just prior to the enactment of regulation X. 
 After X was introduced, the total share of FCS dropped to 4% of TOTAL
--- However the FCS sales number remained same
 Inference-- Sales of few others would have increased after X

Lets see the choices

(1) All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X. 
 It is COULD be true.. 
If the share of FCS has reduced to 4%, without an effect on its sales, the TOTAL would have increased..
If TOTAL has increased, there has to be atleast ONE retailer who has to account for this increase..
 so CANNOT be true in any case..

(2) All other computer companies lost some market share during the four-month period prior to the enactment of regulation X. 
 Since we know the TOTAL remained SAME, but FCS doubled its sales, It is possible that the increase of FCS resulted in some loss to all others..
since it is could be true, YES possible

(3) The enactment of regulation X provided the Friendly chain’s competitors with an advantage they did not previously have. 
 Since after X was introduced, FCS share decreased to 1/2 of total, this COULD be true

(4) The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share. 
 We know that some competitors increased their share. It could be anything as nothing is specified..
and we are ;looking for COULD be true.. so POSSIBLE

(5) In the period following the enactment of regulation X, many new computer retailers that specialized in low-budget computers entered the marketplace.
 There is nothing that says this could not have happened.. so POSSIBLE

Nevernevergiveup · Answer

Over an eleven-month period, during which national retail computer sales remained stable at 400,000 units per month,
sales by the Friendly Computer Stores chain rose 200 percent, increasing the chain’s share of the total market to 7 percent. 
Other retail stores tried, without success, to attract customers away from the Friendly chain.

Then regulation X was imposed on all computer retailers by the federal government. 
In the ensuing months, Friendly’s total share of the market fell to 4 percent, even though its monthly sales volume remained at the same level it had reached just prior to the enactment of regulation X.

Each of the following, in conjunction with the information presented above, could be true EXCEPT:

A. All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X. (Since FCS lost its total share of the market others should have experienced a rise in their sales. This can be the answer.)

B. All other computer companies lost some market share during the four-month period prior to the enactment of regulation X. 
(This addresses the paradox.)

C. The enactment of regulation X provided the Friendly chain’s competitors with an advantage they did not previously have. 
(This addresses the paradox.)

D. The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share. 
(This addresses the paradox.)

E. In the period following the enactment of regulation X, many new computer retailers that specialized in low-budget computers entered the marketplace.(This addresses the paradox.)

PrakharGMAT · Answer

Hi Experts/ chetan2u / mikemcgarry

In this thread the OA given is A,
but in other thread
over-an-eleven-month-period-during-which-national-retail-co-96396.html
OA is D.

Can you please suggest, which is correct...??

Let me debrief what I have understood with an example and please tell me weather I understood the question wrong or my reasoning is wrong-->

Let say there are 4 companies exist in the market-
Toshiba- A computer company
Lenovo- A computer company
Honda- An Automobile company
Maruti- An Automobile company

If at present in computer industry Toshiba market share rose to 7%, then there must be any COMPUTER FIRM whose market share has been decreased.
Similary, if Toshiba market share decrease to 7%, then there must be any COMPUTER FIRM whose market share has been increased.
According to me, if a firm in a particular industry performs well, then there must be a firm which has not performed well.

Note- According to me, weather Toshiba market share increase or decrease.. OTHER industries ( eg. Automobile, textile etc etc) will have no impact on their performance.

So, in this argument wht I understood is..
Friendly is a computer industry whose market share increase to 7% and then a regulation X has been imposed. After imposition of regulation X, friendly market share has been decreased to 4%.

If friendly market share increase to 7% prior imposition of regulation X then there must be a COMPUTER firm whose performance decrease.

and if friendly market share decrease to 4% post imposition of regulation X then there must be a COMPUTER firm whose performance increased.

In my opinion if any kind of fluctuations going on in ny industry then the result of it will only impact that particular industry not any other industry.
Eg- If Toshiba is performing well in the market, then it can only impact the market share of Lenovo but not on HONDA or MAruti.
Similarly,
If Honda is performing well in the market, then it can only impact the market share of MAruti but not on Toshiba or Lenovo.

Now, lets look at the options,
_____________________________________________________________________________________
A. All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X.

D. The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share.
_____________________________________________________________________________________

D says OTHER dramatic changes in OTHER MARKET forces caused the decline in the Friendly chain’s market share

Other dramatic changes in other market forces CAN't impact Friendly which is a computer industry
I hope D can't be possible and hence should be the answer

Can you please assist....

Thank and Regards,
Prakhar

PrakharGMAT · Answer

Hi  chetan2u ,

I got what I was missing...
Can you please have a look on this situation and tell .Is my reasoning correct..??

Let say there are 4 companies exist in the market-
Toshiba- A computer company
Lenovo- A computer company
Honda- An Automobile company
Maruti- An Automobile company

If at present in computer industry Toshiba market share rose to 7%, then there must be any COMPUTER FIRM whose market share has been decreased.
Similary, if Toshiba market share decrease to 7%, then there must be any COMPUTER FIRM whose market share has been increased.
According to me, if a firm in a particular industry performs well, then there must be a firm which has not performed well.

Note- According to me, weather Toshiba market share increase or decrease.. OTHER industries ( eg. Automobile, textile etc etc) will have no impact on their performance.

So, in this argument wht I understood is..
Friendly is a computer industry whose market share increase to 7% and then a regulation X has been imposed. After imposition of regulation X, friendly market share has been decreased to 4%.

If friendly market share increase to 7% prior imposition of regulation X then there must be a COMPUTER firm whose performance decrease.

and if friendly market share decrease to 4% post imposition of regulation X then there must be a COMPUTER firm whose performance increased.

In my opinion if any kind of fluctuations going on in ny industry then the result of it will only impact that particular industry not any other industry.
Eg- If Toshiba is performing well in the market, then it can only impact the market share of Lenovo but not on HONDA or MAruti.
Similarly, 
If Honda is performing well in the market, then it can only impact the market share of MAruti but not on Toshiba or Lenovo.

Is this reasoning correct..?

Please assist.
Thnks

chetan2u · Answer

Hi,
you are correct to an extent..
the point is what does other market forces MEAN..
Does it MEAN market forces other than enactment of regulation could have had impact on this decline..

what we are told is tht after enactment of X,the share fell, it could be a mere coincidence too..
had it been Strengthening , yes we would have used it in the favour of our answer that X had something to do with the decline, but here we are looking for COULD..

although the answer in the other is given as D, and may be OA is D, i will hold my grounds on A

DmitryFarber · Answer

As others have pointed out, the answer is listed as A in other forums, and A is the only logical answer. If Friendly's sales are the same but its market share is down, then some of its competitors must have seen an increase in market share. Even if new vendors entered the market, they would still have to see an increase in market share (from zero to positive!) in order to impact Friendly's market share. A cannot possibly be true given the initial information, so it has to be the answer.

(I should add that this is clearly copied from an official LSAT question--PT 31-2-15, for anyone who wants to look it up. In that question, A is the answer for exactly the same reason, so it's pretty clear that A is the intended answer. The original post here should be corrected.)

(I should add that this is clearly copied from an official LSAT question--PT 31-2-15, for anyone who wants to look it up. In that question, A is the answer for exactly the same reason, so it's pretty clear that A is the intended answer. The original post here should be corrected.)

DmitryFarber · Answer

wayne7teng , I see no reason to say that if A were false, B and E would also have to be false. B talks about the period before the regulation, when Friendly was on the rise. Nothing that happens later can invalidate this choice on its own. As for E, it's perfectly compatible with A being false. The entry of a new vendor does not necessitate a drop in *sales volume* on the part of other vendors.

mikemcgarry · Answer

I don't have the highest opinion of this question. Among other things, I don't know that I have ever seen an official question of a " could be true " variety. The GMAT CR definitely has " must be true " questions, but this is a looser and sloppier variation that the GMAT doesn't explore. We know that, during the first eleven-month period before Regulation X, Friendly Computer Stores tripled its sales and shot up to 7% of the market space. Then, Regulation X goes into effect. In the next moths, Friendly Computer Stores keeps its high levels of sales, but this same value now counts for a smaller percent. A percent is a part over whole ratio. If the part, FCS's sales, stays the same and the percent goes down, this means that the whole, the sales across the whole industry. It absolutely must be true that other computer companies had increased sales during the period following Regulation X. (A) All other computer retailers experienced a drop in their sales volume during the four-month period following the enactment of regulation X. This baldly contradicts what we know must be true. There is absolutely no way this statement could be true. This is a promising choice for the answer. (B) All other computer companies lost some market share during the four-month period prior to the enactment of regulation X. Certainly, if FCS gained market share, at least some other companies lost market share. Yes, it is at least conceivable that EACH and EVERY other company lost market share. That could in a magical special case world. This is part of what is sloppy about this entire format. (C) The enactment of regulation X provided the Friendly chain’s competitors with an advantage they did not previously have. This is certainly plausible, because it seems that the competitors increased their sales while FCS stayed flat. (D) The enactment of regulation X did not provide the Friendly chain’s competitors with an advantage they did not previously have; other dramatic changes in other market forces caused the decline in the Friendly chain’s market share. This is tempting, though not in the way that good GMAT CR wrong answer would be a distractor. It's possible that general condition fostered by Regulation X favored wild grow in the market, and these conditions allowed all other companies to make headway, but that something unrelated to Regulation X (lawsuit, labor dispute, accident, etc.) hampered FCS, such that in these otherwise favorable general conditions, the best it could do was to tread water and maintain the level where they already were. (E) In the period following the enactment of regulation X, many new computer retailers that specialized in low-budget computers entered the marketplace. This certainly would explain the increase in the competitors and increase in size of the entire sector. Choice (B), (C), (D), and (E) are choices that could be true, so these are wrong. (A) is the only one that is strictly impossible, so this is the correct answer. Once again, I think the " could be true " question format is sloppy. The official questions are much more logically tight. Here's a book review that may be germane: Princeton Review GMAT Book Review: Cracking the GMAT 2017 Mike :-)

DmitryFarber · Answer

mikemcgarry , I agree that this problem type isn't likely to show up on the GMAT, but there's nothing sloppy about the logic. The LSAT uses this format all the time, as in the problem this was copied from! "Could be true EXCEPT" just translates to "MUST BE FALSE," and as you've shown, only A must be false. In any case, I couldn't find a GMAT question with this format, although I did find a discrepancy question that uses "could . . . EXCEPT": https://gmatclub.com/forum/the-tobacco- ... 12457.html

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