Escalating worldwide demand for corn is expected to cause the market

Question

Escalating worldwide demand for corn is expected to cause the market price of corn to rise sharply and remain high. Although corn is extensively used as feed for livestock, livestock feed accounts for only a small fraction of the retail price of meat. Therefore, the increase in corn prices is very unlikely to produce any comparable long-term increase in the retail price of meat.

Which of the following, if true, most seriously weakens the argument?

(A) The cost of shipping and handling meat has also risen sharply.

(B) Livestock producers who currently use corn to feed their livestock have the option of switching to other kinds of feed.

(C) The rising cost of feed is leading some livestock producers to leave the business, thereby reducing the future supply of meat.

(D) Worldwide demand for grains other than corn has also increased.

(E) The price of corn affects the retail price of a variety of other food products more than it affects the price of meat.

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Official Answer

C

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MacFauz · Accepted Answer

It has to do with supply and demand. Low supply and high demand leads to higher prices. Hence C correctly weakens the argument.

However as answering this question requires some outside knowledge (even though it may be very limited), I have my doubts whether it is a typical GMAT question.

Kudos Please... If my post helped.

gmatchase · Answer

By POE, I got C

A. Cost of shipping and handling - out of scope
B. Strengthen
C. Don't know how this weakens
D. Irrelevant - don't know if other grains are used to feed
E. other products - out of scope

Can someone explain how C weakens?

dentobizz · Answer

Bumping for review and further discussion*.

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niteshgmat · Answer

Conclusion : Therefore, the increase in corn prices is very unlikely to produce  any comparable long-term increase  in the retail price of meat.

Correct answer should consider the long-term increase, i.e., anything that will impact the price in future. Since (C) is the only one talking about the future price by stating that since producers will leave the business, future supply will decrease, it correctly weakens the conclusion.

minwoswoh · Answer

Hi MacFauz,

Good points!

I agree with you that this question does require outside knowledge, since nowhere in the passage is it mentioned that more supply of meat would yield lower prices of meat. However, it is an official Gmat Prep question.

Since I am very limited on Economy, can I ask you if the following statements are mostly true:
- If Demand increases and Supply remains equal, then Price increases
- If Demand decreases and Supply remains equal, then Price decreases
- If Supply increases and Demand remains equal, then Price decreases
- If Supply decreases and Demand remains equal, then Price increases.

Thank you so much!

Justin123456 · Answer

Hi there sorry I don’t understand why A is not the correct answer, when C is, since when supply of meat from livestock drop, livestock feed accounts for only a small fraction of the retail price of meat, as stated in the question, therefore the affect to long term price should be minimal.

Thanks!

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Thanks!

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dory12 · Answer

Justin123456

The author argues that the increase in corn prices will NOT lead to the increase in the retail price of meat. So if we want to weaken the argument, we have to prove that the increase in corn prices will affect the retail price of meat.

Choice A doesn't have anything to do with the increase in corn prices

Choice C talks about the rising costs of feed, which will make the livestock producers leave the business. If some livestock producers leave the business, less feed will be produced, which will lead to less production of meat. Less production of meat will lead to higher price of meat.

Here it's most important to understand that the author says livestock feed accounts for only a small fraction of the retail price of meat. He/she does NOT say that corn price accounts for a small fraction of the livestock feed price. It's important to distinguish between these two. Corn prices may play a huge part of feed prices, so if corn prices rise, feed costs will rise as well. This will make Choice C correct.

mSKR · Answer

Yes C weakens clearly because as owners go out of business, it would increase supply of meat suddenly in market. Thus it would leads to fall of meat prices
In Current scenarios: Meat from livestock is limited. account for retail Price is very limited.
Later: Meat suddenly increased in market. Effect on price would be more.

rahularman · Answer

Demand for corn continues to rise.
Corn extensively used to feed livestock -> constitutes small fraction of retail price of meat.

=> conclusion : Increase in corn price will not impact meat retail price proportionally.

Argument type - causal

Assumption : Increase of corn price is not going to contribute meat price in any other way.

a) shipping and handling costs irrelevant to the argument.
b) other types of livestock feed ...out of scope
 c) increase of corn -->> livestock producers out of business --->> short on supply --->> increase in price.
 
d) demand of grain...out of scope.
e) other food price..out of scope.

Ans : c)

Ilanchezhiyan · Answer

Simply put, 
Argument: High Corn Price DOES NOT Affect Meat Price

How do you weaken it? Find an option that says it DOES. You can see that option C DOES.

EveLin122 · Answer

Only C can explain the price of corn will lead to price of meat change.

because it says unlikely to produce any comparable longterm increase in the retail price of meat. by contrast, it actually could impact the price.

btsaami · Answer

Assumption is cost of corn used as livestock feed is not significant enough to impact long term price of meat.

Option C say price of livestock feed is significant that it is leading to close some business and reduce the meat supply. This is directly contradicting the above assumption therefore it weakens the argument.

Other options don't work because of below reasons:
A) While cost of shipping and handling meat has risen sharply might suggest that meat price increase but it doesn't provide clear link whether corn prices will impact the meat price or not.

B)strengthens. If there are more options to switch livestock, the increase in corn price will not affect the meat price significantly.

D) Out of scope as we don't know other grains can be used for livestock feed.

E) might strengthen a bit but doesnt answer whether meat will be affected.

Escalating worldwide demand for corn is expected to cause the market

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Escalating worldwide demand for corn is expected to cause the market

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

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