Consumer's overall perception of the value of a purchase is based not

Question

Consumer's overall perception of the value of a purchase is based not just on assessing the product's inherent value (the acquisition value) but also in part on assessing the value of the "deal", i.e., the transaction value. To assess the transaction value, buyers tend to compare the sales price with another price, the "reference price", that they take to represent the product's real value - another advertised price for the same product or the price of a competing product. The more the reference price exceeds the sale price, the greater the transaction value. When advertising, retailers now routinely provide two prices: a suggested reference price and their actual selling price. Thus, when the selling price is held constant, consumers tend to perceive offers with higher suggested reference prices as presenting a better deal since they suggest greater savings.

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

A- Acquisition value does not affect consumers' assessment of transaction value.
B- Advertised reference prices may differ from manufacturers' suggested retail prices.
C- Consumers almost never pay the full advertised reference price for a product.
D- Consumers perceive most suggested reference prices in retailers' advertising to be sufficiently credible as a guide to transaction value.
E- Transaction value is more important than acquisition value in predicting consumer purchasing behavior.

tryambaks · Accepted Answer

Huge chunk with so many information

- What I must do ? :shock:

Find the conclusion :roll:

What is my tool ? :oops:

Hunt for a conclusion indicator - 'thus' - So ... What is the conclusion?? Thus , when the selling price is held constant, consumers tend to perceive offers with higher suggested reference prices as presenting a better deal since they suggest greater savings. - this much is our Scope We must find an answer choice that strengthens this point - consumers while selecting a product are only concerned about the difference of sell price and reference price that they can calculate from the information shared by the retailers.So consumers that the retailers suggestion as their reference pint only (D) says , retailers given reference price is sufficient for the consumers and they will look no further Other options are not focused on this point and some of them employ acquisition value which totally out of scope of the conclusion Hence answer is (D)

daboo343 · Answer

D seems the correct answer. 
on negating D shatters the conclusion

Specter · Answer

The conclusion - last line - talks about "reference price" and the reference price is set by the retailers.

The assumption is a piece of information that MUST be true in order for the conclusion to be true. Of the five answer choices , B , C , & D mentions reference prices. Reference prices need to be related to consumers. B out.

Between C & D. Also, Reference prices are used to guide transaction value. Only D remains.

shakticnb · Answer

We must find an answer choice that strengthens this point - consumers while selecting a product are only concerned about the difference of sell price and reference price that they can calculate from the information shared by the retailers.So consumers that the retailers suggestion as their reference pint

only (D) says , retailers given reference price is sufficient for the consumers and they will look no further

Other options are not focused on this point and some of them employ acquisition value which totally out of scope of the conclusion

Hence answer is (D)

chesstitans · Answer

I tried, and it seems that there is no need to read the whole argument to choose D as the correct answer.
For this reason, this question is only at sub lvl 600.

B,C,E are out for sure b/c these options do not sound like an assumption but out of scope.
 The first sentence helps to eliminate A => D is the answer.

sayan640 · Answer

VeritasKarishma   GMATNinja   egmat   GMATGuruNY   mikemcgarry 
Can you please explain this question in detail ?

KarishmaB · Answer

Perception of Value = Inherent value + Transaction value

Transaction value =  Reference price  - Sale price

So now, when advertising, retailers provide two prices: a  suggested reference price  and their actual selling price.

Conclusion: When sale price is held constant, consumers tend to perceive offers with higher  suggested reference prices  as presenting a better deal

The conclusion talks about "suggested reference price" (that the retailers advertise). The transaction value that the argument talks about is the diff between reference price (another advertised price or the price of a competing product) and sale price. So the gap in the logic is that the suggested reference price provides credible value of reference price and hence, transaction value.

Option (D) does just that. 
D- Consumers perceive most  suggested reference prices  in retailers' advertising to be sufficiently credible as a guide to transaction value.

So (D) is correct.

SairamRamo · Answer

Conclusion of the argument :   when the selling price is held constant, consumers tend to perceive offers with higher suggested reference prices as presenting a better deal

we need something that strengthens the above statement

A- Acquisition value does not affect consumers' assessment of transaction value.
 >This cannot be assumed as per the first sentence of the argument. This neither strengthens not weakens the above conclusion

B- Advertised reference prices may differ from manufacturers' suggested retail prices.
 >Try  negating ,  Adv ref price will be same as Retail price , this dosent weakent the argument.

C- Consumers almost never pay the full advertised reference price for a product.
 >Irreleavent point to discuss

D- Consumers perceive most suggested reference prices in retailers' advertising to be sufficiently credible as a guide to transaction value.
 >Correct
 
E- Transaction value is more important than acquisition value in predicting consumer purchasing behavior.
 >Argument never does the comparison between  transaction value and acquisition value , it only says both are necessary

Logo · Answer

D aside, can someone explain to me why B is not correct?

KalleAbhi · Answer

A . Acquisition value does not affect consumers’ assessment of transaction value. 
 
 Irrelevant. The argument is only about  transaction value , not whether acquisition value plays a role elsewhere.  
B . Advertised reference prices may differ from manufacturers’ suggested retail prices. 
 
 Possible, but not necessary. Even if they were identical, the logic would still hold.  
C . Consumers almost never pay the full advertised reference price for a product. 
 
 Not required. The argument doesn’t depend on how often they pay it, only on how they  perceive  it.  
 D. Consumers perceive most suggested reference prices in retailers’ advertising to be sufficiently credible as a guide to transaction value. 
 
(Correct Answer)This is exactly the assumption. If consumers don’t trust the reference price, then a higher suggested reference price won’t make the deal look better.
 
E . Transaction value is more important than acquisition value in predicting consumer purchasing behavior. 
 
 Too strong. The argument doesn’t claim transaction value is  more important , only that retailers use it to influence perception.

egmat · Answer

This is a tricky assumption question that really tests your ability to identify what  must  be true for an argument to work. Let me walk you through the core reasoning that unlocks this problem.

Understanding the Argument's Mechanism

The argument concludes that when retailers keep selling prices constant but use higher reference prices, consumers will perceive better deals. But notice what this conclusion  depends on  - it assumes consumers actually use these reference prices in their mental calculations.

Think about it this way: if you completely ignored or distrusted the reference prices that retailers show you, would higher reference prices make any difference in how good you think the deal is? Of course not!

The Critical Gap

Here's what you need to see: the argument jumps from "retailers show reference prices" to "higher reference prices create better deal perception." But this only works if consumers find these reference prices credible enough to use them as comparison points.

Why Answer Choice D Works

Choice D states that "Consumers perceive most suggested reference prices in retailers' advertising to be sufficiently credible as a guide to transaction value."

This is exactly what the argument needs to assume. If consumers viewed reference prices as completely fake or unreliable, the entire mechanism breaks down. The psychological comparison effect only works when people trust the reference point enough to use it in their decision-making.

Why the Other Choices Don't Work

Choice A goes too far by claiming acquisition value has  no effect  - the argument doesn't need this extreme claim.

Choice C might seem logical, but whether people actually pay reference prices doesn't matter - what matters is that they use them for comparison.

Choice E makes a comparative claim about importance that the argument doesn't require.

The key insight here is distinguishing between what would  strengthen  an argument versus what the argument  must assume  to be true.

You can check out the  complete systematic framework for assumption questions on Neuron , where you'll discover the 4-step method that works across all assumption question types, plus common trap patterns to avoid. You can also practice with  comprehensive solutions for similar official questions here  to build consistent accuracy in Critical Reasoning.

Consumer's overall perception of the value of a purchase is based not

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GMAT Critical Reasoning (CR) Questions

Consumer's overall perception of the value of a purchase is based not

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