As a result of consumers’ increased awareness of the health risks asso

Question

As a result of consumers’ increased awareness of the health risks associated with heavy consumption of red meat, the meat of the ostrich has become increasingly popular as a low-fat, low cholesterol alternative to beef. Accordingly, the number of ostrich farms in the United States has nearly quadrupled since 1980, flooding markets with ostrich products. However, the price-per pound of ostrich meat, adjusted for inflation, has not decreased at all over the past several years.

Which of the following, if true, would best explain the steady price-per-pound of ostrich meat?

A. The demand for ostrich products has outpaced the supply.

B. Ostriches are especially difficult to breed in captivity.

C. Other types of meat, such as pork and poultry, have decreased in price over the past several years.

D. Purveyors of beef have not attempted to counter beef’s poor public image.

E. The number of supermarkets that carry ostrich meat has increased steadily since 1980.

IrakliG · Accepted Answer

E for me..

If OA is true, it means that demand is greater than supply, making ostrich products deficient. According to this, and economic principals, the price of deficient product would rise rather than remain steady.

Answer E says, that a number of supermarkets which carried ostrich products increased, so demand was met, thus prices remained steady.

Bunuel · Answer

OFFICIAL EXPLANATION

The passage states that the price-per-pound of ostrich meat has not decreased even though the supply of the meat has been abundant. We are asked to find an explanation for this seeming contradiction.

(A) CORRECT.  If the demand has outpaced the supply, even if the supply is abundant, it is likely that the price will remain steady, at the very least.

(B) The difficulty of breeding ostriches is not relevant to the market price, given that the supply of the meat is abundant.

(C) If other types of meat have decreased in price, one might expect that ostrich meat would decrease as well to remain competitive.

(D) The lack of effort of the part of the beef industry to counter beef's poor image does not speak to the issue of why the price of ostrich meat has remained steady despite an abundant supply.

(E) If ostrich meat becomes more readily available, one might expect that the price of the meat would decrease.

tuanquang269 · Answer

Between A and E

Your reasoning is flawed because the citizens are the final customer. If their demand is under the supply, the second price that offered in the supermarket also decrease => the first price that offered by whole sales farmers will also decrease.

In some part, choice E only explain the ostrich flood the market. No more.

Choice A is more concise because the argument say that "the price of ostrich has not decreased at all over the past several years." This fact does not mean that the price stay constant. It can be constant or increase depend on the relation between supply and demand.

aniteshgmat1101 · Answer

Answer should be A.
Two main points to consider: Market is filled with Ostrich product, and Price is not going down.
This imply that demand must be more than what is being supplied, and this is causing price soaring.

BassanioGratiano · Answer

I used the law of supply and demand here. I don't know if the GMAT requires us to use it but I found it helpful in this question. 
If supply exceeds demand, prices go down.
If demand exceeds supply, prices go up.

As a result of consumers’ increased awareness of the health risks associated with heavy consumption of red meat, the meat of the ostrich has become increasingly popular as a low-fat, low cholesterol alternative to beef. Accordingly, the number of ostrich farms in the United States has nearly quadrupled since 1980, flooding markets with ostrich products. However, the price-per pound of ostrich meat, adjusted for inflation, has not decreased at all over the past several years. Which of the following, if true, would best explain the steady price-per-pound of ostrich meat?

A. The demand for ostrich products has outpaced the supply.
 Demand has exceed the supply. This fits the bill.

B. Ostriches are especially difficult to breed in captivity.
 This should apply for both situations, in 1980 and now. Since it states that the market has been flooding with ostrich products the price of meat should go down unless the demand has outweighed the supply.

C. Other types of meat, such as pork and poultry, have decreased in price over the past several years.
 Other meat markets does not impact the ostrich market.

D. Purveyors of beef have not attempted to counter beef’s poor public image.
 Same as C.

E. The number of supermarkets that carry ostrich meat has increased steadily since 1980.
 Supply has gone up but it does not say anything about the demand.

Spartanfan · Answer

This question and the explanation is illogical. If demand outpaces supplies, then prices go up -regardless of the product - this is basic economic 101. Why would ostrich farmers not increase prices if the market can withstand price increases? This explanation makes no sense what so ever. Answer C makes better sense because if the price of other meat decreases then folks may start looking for cheaper alternatives to ostrich meat, thus holding the price of ostrich in check.

mohammadfaraaz123 · Answer

The farms have quadrupled. So, supply has increased manifolds and yet the prices have not dropped. There has to be something with demand which is keeping the price from hitting its equilibrium (Demand = Supply, resulting in optimum price). We need an answer choice explaining this phenomenon.

Which of the following, if true, would best explain the steady price-per-pound of ostrich meat?

A)The demand for ostrich products has outpaced the supply.

Supply has grown but demand has grown even faster, keeping the commodity rare in market resulting in price on higher side. CORRECT

B)Ostriches are especially difficult to breed in captivity.

But Supply has quadrupled.  Incorrect .

C)Other types of meat, such as pork and poultry, have decreased in price over the past several years.

Could have resulted in price rise of other options as well, why only Ostrich?  Incorrect

D)Purveyors of beef have not attempted to counter beef's poor public image.

This would have benefitted all other alternatives to beef not just Ostrich.  Incorrect .

E)The number of supermarkets that carry ostrich meat has increased steadily since 1980.

Understandable since the farms have quadrupled but why are prices high? With more supply the price should have come down.  Incorrect

BazingaGMAT · Answer

if demand outpaced supply then price of ostrich has to increase. why will it remain constant?

krndatta · Answer

BazingaGMAT

Hi, 
Hope this finds you well. 
I am not an expert but can help. 
The question stimulus ask us to select the best answer choice of the lot.

Option A:- Fits the bill. The stimulus says that supply has quadrupled. Plus this option says that demand has outpaced supply. So this best explains why the prices have remained constant. I too applied the basics of economics while answering the question but out of the lot this was one that was able to explain the best. 
Supply increased and demand increased too, hence price remains the same.

Option C:- the prices of other types of meat has decreased. If this was the case then then supply of other types of meat should have risen. Furthermore, increase in price of other kinds of meat would have impacted the sales of ostrich meat not decrease.

Option E:- on the other hand just tells us that supply has increased. As a matter of fact, this information is already given in the stimulus. Plus, this option does not mention anything about demand. Has it increased or not?

So out of the lot, Option A fits the best. 
Hope your query stands resolved.

Criticism would be welcome on my analysis.

Thanks

VerbalBot · Answer

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