In anticipation of the coming year, Tecumseh Autos, a national auto

Question

In anticipation of the coming year, Tecumseh Autos, a national auto manufacturer, is anticipating sales of its vehicles. Tecumseh manufactures compact cars, sedans, minivans, trucks, SUVs, and sports cars. In all categories of vehicles, Tecumseh sets prices so that the profit per vehicle is, on average, about the same. Since the best indicator for sales in each category are the sales last year, Tecumseh’s marketing analysts’ prediction of the three most profitable categories of vehicles in the coming year will be compact cars, minivans, and SUVs respectively.

Tecumseh’s marketing analysts’ prediction relies on which one of the following assumptions?

(A) Across all manufacturers, the most popular cars on the road in America are compact cars, minivans, and SUVs.

(B) The models of Tecumseh’s compact cars to be sold in the upcoming year are identical to or similar to those of last year.

(C) Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs and less than minivans.

(D) The prediction will be refined after an analysis of the sales in the first quarter of this year.

(E) The number of models of compacts cars that Tecumseh produces is greater than the number of models of either minivans or SUVs.

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Assumption questions are among the most common questions on the GMAT CR. For a discussion of them, with three other practice questions, as well as the OE of this particular question, see:
https://magoosh.com/gmat/2016/gmat-crit ... questions/

Mike

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Official Answer

C

mikemcgarry · Accepted Answer

Dear modarresansharif , I'm happy to respond. :-)

My friend, I don't believe you were reading (C) carefully enough. Think about it: (C) Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs AND less than minivans . It's very important to recognize the word " category " is singular, and it is very important to recognize the significance of an " and " rather than an " or ." Of course it's true, as you say, that every other category has profits that are either greater than SUVs or less than minivans. That's absolutely true, but that's not what (C) is saying. If we read (C) carefully, it is saying that no single individual category has a profit that is simultaneously both greater than SUVs and less than minivans. In other words, there is no category that ranks between those two in terms of profit. This is absolutely true, because SUV are #2 and minivans are #3. Now, my friend, I want to consider how you addressed this question. Your opening comment was " I believe the question is wrong ." This could be construed as disrespectful. Think about the following scenario. Suppose, after you get your MBA, you are hired at some job. Suppose you observe something associated with the company that looks like an error to you. If you go into your boss's office and begin by saying " I believe this is wrong ," and then it turns out, as with this question, you misinterpreted something, think about the opinion this boss will have of you. Nobody else likes to be told " You are wrong ," and if someone say this and then it turns out to have no basis, it is as if that person insulted someone for no reason. If someone does this, other people's respect or that person will tend to drop off quickly. You see, traditional religious and ethic systems say that humility is a virtue precisely because humility is an extraordinarily powerful strength that can help you in an astonishing number of ways in life. The humble person who says, " Perhaps it is due to my mistake, but this doesn't make sense to me " is in a win-win scenario. If the matter in question is really correct, this humble attitude makes someone else more apt to explain it and clarify the matter. If the matter is really wrong, the humble person gets all the credit for pointing out the mistake as well as the personal respect for doing so humbly. There are few personality traits that will open more doors or impress more people than will genuine humility. Furthermore, just in terms of pure pedagogy, your mind is more primed to learn when you are in genuine questioning mode. To the extent that you adopt the " this is wrong " mindset, you shut down curiosity and openness to new perspectives. Curiosity and openness to learning are also powerful skills that should not be underestimated: they also have the potential to assist you powerful in a number of venues in your life, including in GMAT preparation. They are definitely the best mindsets to cultivate if you want to learn the most. My friend, does all this make sense? Mike :-)

Shiv2016 · Answer

Premise: In anticipation of the coming year, Tecumseh Autos, a national auto manufacturer, is anticipating sales of its vehicles. 
Premise: Tecumseh manufactures compact cars, sedans, minivans, trucks, SUVs, and sports cars.
Premise: In all categories of vehicles, Tecumseh sets prices so that the profit per vehicle is, on average, about the same. 
Premise: Since the best indicator for sales in each category are the sales last year, 
Conclusion: Tecumseh’s marketing analysts’ prediction of the three most profitable categories of vehicles in the coming year will be compact cars, minivans, and SUVs respectively.

So the company is expecting the sales of its vehicles to rise in the coming year and 3 categories would be Most profitable.
Profit on compact cars, minivans, and SUVs would on average be same.
The underlying assumptions can be:
1) Buyers of these 3 models are comparatively more than for other categories 
2) Last year sales of these 3 models was more than other categories
3) As profit on average is same per vehicle, there would be more buyers to make these categories MOST profitable
Let’s look at the choices:
(A) Across all manufacturers, the most popular cars on the road in America are compact cars, minivans, and SUVs.
All manufacturers is out of scope.

(B) The models of Tecumseh’s compact cars to be sold in the upcoming year are identical to or similar to those of last year.
OUT OF SCOPE. Models do not matter because in the argument, its nowhere mentioned that if model changes the sales would increase or the buyers look for models…..

(C) Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs and less than minivans.
This is the CORRECT choice.
Negated statement: Last year, other category of Tecumseh’s vehicles generated more profits than SUVs and less than minivans.
This completely shatters our conclusion because if there is other vehicle that would give more profits than SUV (mentioned in the 3 models), then the profits would be impacted. 
We just know that ‘on average’ the profit is same but the profit is not EXACTLY same……

(D) The prediction will be refined after an analysis of the sales in the first quarter of this year.
Irrelevant

(E) The number of models of compacts cars that Tecumseh produces is greater than the number of models of either minivans or SUVs.
Again we are more concerned with the sales and not the production data.

I hope this understanding is correct…….

Aves · Answer

Hi Mike, It may be not related to this topic but I'd like to know the difficulty level of other 3 questions on your website. I got question 3 and 4 wrong

mikemcgarry · Answer

Dear Aves, I'm happy to respond. :-)

In general, when I publish a batch of 3-4 questions, I arrange them from ones I think are easier to ones I think are harder. I did think that questions #3 and #4 are reasonably difficult questions. I believe inherent in your question is a myth that each question has a scientifically discernible difficulty level, and that understanding this inherent difficult is part and parcel of writing a question. To be perfectly honest, I am not a particularly good person to ask about a question I wrote, because I understand any question I write inside-out, and this perspective makes it hard to judge the difficulty for someone approaching the question from scratch. Also, I believe there is something highly questionable about the idea of assigning individual questions specific point values in terms of difficulty. See this blog article Is this a 700+ level GMAT question? Does all this make sense? Mike :-)

modarresansharif · Answer

Hi
i believe the question is wrong 
option c says suv was the most profitable category and minivan the least profitable one which is based on last year sale.
the prediction is best on last year sale. 
but the stimulus claims that the compact car is gonna make more profit than minivan and the third category will be suv.
thus the fourth and fifth categories will be other catergories, which will be less profitable

andy2502 · Answer

Hi mikemcgarry

I dont think I really understand the rationale of selecting Option C. Can you please elaborate why Option C is the best choice and what is wrong with Option A. Frankly speaking, I thought all the 4 options to be irrelevant.

Question seemed to be very tough!!

Question seemed to be very tough!!

mikemcgarry · Answer

Dear andy2502 , I'm happy to respond. :-)

Yes, this is a tough question. My friend, here's what I am going to say. You are on GMAT Club to learn. Well, the process of learning, the process of education is not something that the experts "do" to you. Instead, it's something you do by yourself and for yourself, and experts such as myself simply support you in the process. One of the most valuable qualities a student can have is initiative . if you can clearly demonstrate initiative, this will set you apart in your applications for B school, in your job applications, and with respect to opportunities for promotion in your career. The people who always want to be told what to do don't advance very far in their careers. The people who are confidently self-sufficient and able to explore the unknown on their own are the ones who can perform well as leaders. Rather than simply hand you an answer, because I am ambitious for you, I am going to ask you to take initiative. Look at at the link at the top post of the page: that post , in which the original problem appears, contains the OE. Also, look at my response to modarresansharif yesterday, in which I explain (C) in detail. Find out everything you can about the question first, then come back and, referring to all these sources, ask your question. You see, most students will not achieve elite scores on the GMAT unless they commit themselves to the habits of excellence. One such habit is that of asking excellent questions. See: Asking Excellent Questions To support your own learning, I am going to challenge you to write the most excellent detailed question you can about this question. My friend, I truly wish you the very best in your studies. Does all this make sense? Mike :-)

emeraldweapon · Answer

Hi Mike,

I am not really convincing with the option C and end up choosing option A. Here is my rationale:

Premise : 
1. Tecumseh Autos anticipate sales of next year.
2. Tecumseh Autos manufacture 5 types of autos: Compact cars (A), sedans (B), minivans (C), trucks (D), SUVs (E), and sports cars (F)
3. Tecumseh Autos set price so that profit of A, B, C, D, E and F, on average, is the same (lets say, x)
4. New year forecast based on sales in previous year.

Conclusion :
Three most profitable ones will be A, C and E

Underlying assumption : 
Since:
(1). Profit per car is expected to be the same in the upcoming year, and. 
(2). Sales forecasts are based on previous years' actual level.

Then,
 Sales of A, C and E in next year > Sales of the other two 
Or,  Sales of A, C and E in previous year > Sales of the other two , which is mentioned in option A

For option C, as the profit per car is the same in next year, last year profit factor is irrelevant, in my opinion, to determine future profitability.

Thanks,

RMD007 · Answer

Hi  mikemcgarry , I read all of your posts above but still I have following doubt.

I was intended towards option C, but at last I selected A. Option C only talks about SUV's and Minivan's and not about Compact cars. Last year, if the sales of compact cars are less than that of SUV's and Minivan's then I think the conclusion may is not likely to be true.

Please clear this understanding if it is wrong..

johnnycage88 · Answer

Dear Mr McGarry

May I kindly clarify a point: In option C, does the word "profits" necessarily imply in the second part of the sentence i.e. less than minivans?

I did not pick this answer choice as it seem to indicate anything can be 'less than minivans'. Maybe I am just reading too much into this.

I will be grateful for your guidance.

Best wishes,
Hamant

mikemcgarry · Answer

Dear RMD007 , I'm happy to respond. :-)

Just because (C) only mentioned two of the three cars is not, in and of itself, a reason to reject it. Yes, if compact cars were even lower than SUVs and minivans, that would be another issue, but the problem does not ask us to consider that issue. Choice (A) is not correct because it is too far-reaching, concerning all manufacturers in the market. Choice (A) is vaguely suggestive but not strictly relevant to the prompt argument. Did you read the explanation for this particular question? Look specifically at that, at the blog linked above, and let me know if you have questions about it. Dear hmaini I'm happy to respond. :-)

My friend, choice (C) is 100% grammatically correct, and this is a point of grammar that can be particularly hard for non-native speakers to appreciate. See this blog article: Dropping Common Words in Parallel on the GMAT Let me know if you have any questions about that blog article. Mike :-)

CantDropThisTime · Answer

To me it seems more like a "must be true" question than an "assumption" question. Or I am not able to understand the question at all.

I choose "B" for this "assumption" question.

mikemcgarry · Answer

Dear ravi11 , I'm happy to respond. :-)

My friend, do you really think there is a huge difference between assumption questions and "must be true" questions? Remember that, on the GMAT CR, a statement can be an assumption only if it must be true for the argument to work. Both assumptions and inference questions involve finding statements that must be true. It's true, this question here also might have been framed as an inference question, but it works perfectly well as an assumption question. Does all this make sense? Mike :-)

allenmartin1986 · Answer

Isnt this more of an inference type as opposed to an assumption type of question? How does this assumption (C) bridge the premise to the conclusion?

mikemcgarry · Answer

Dear allenmartin1986 , I'm happy to respond.

There's not necessarily the sharpest distinction between an assumption and an inference. If the passage is suppose to be taken as completely true, then (C) would be an inference. As it is, the argument is simply presented as an uncertain thing, needing logical bolstering, and (C) provides support for it as an assumption would. Here, (C) doesn't necessarily "bridge," but it quite successfully passes the Negation Test. This later is a more widely applicable indication of an assumption. Does this make sense? Mike

abrakadabra21 · Answer

=> profit per vehicle is same for all categories. 
=> main criteria : sales 
=> most profitable (CC, MV, SUV) Coming year => which means sales LY (CC, MV, SUV)

assumption:-
1. Coming year ~ last year
2.

Tecumseh’s marketing analysts’ prediction relies on which one of the following assumptions?

(A)  Across all manufacturers , the most popular cars on the road in America are compact cars, minivans, and SUVs.

(C) Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs and less than minivans.

(E) The number of models of compacts cars that Tecumseh produces is greater than the number of models of either minivans or SUVs.

why can't it be E? We know that Profitability here depends upon sales (as we are neutralizing profit per vehicle). 
if The number of models of compacts cars that Tecumseh produces is less than the number of models of either minivans or SUV, then sales of Compact cars can't be higher. because if you don't have sufficient numbers of cars to sell, then how would you have sales???

mikemcgarry   sayantanc2k

mikemcgarry · Answer

Dear abrakadabra21 , I'm happy to respond.

My friend, I will point out a slight misreading on your part. You thought the argument said: " profit per vehicle is same for all categories ." What the argument actually said was: " Tecumseh sets prices so that the profit per vehicle is, on average, about the same ." There's some wiggle room there. What does this mean? Let's say that profit per car for each compact car is $1005. Let's say that profit per vehicle for each minivan is $995--about the same, within about 1% of each other. Suppose they sell 1000 compact cars, for a profit of $1,005,000. Suppose they sell 1001 minivans, for a profit of $995,995. They sold more minivans but the most profit was associated with compact cars. Admittedly, this is a slightly contrived example, but it is possible for the number of minivans sold to be equal or a few greater than the number of compact cars sold, and still have compact cars have the most profit. As the total number of cars becomes large, even small wiggle-rooms differences become large, and of course, we have no information about the scale of the operation here. Does Tecumseh Autos sell 10^3 cars, 10^6 cars, or 10^9 cars each year? We have no way of knowing, so if the result changes with scale, it's not reliable. Does all this make sense? Mike

nayyarsidharth · Answer

Dear modarresansharif , I'm happy to respond.

My friend, I don't believe you were reading (C) carefully enough. Think about it: (C) Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs AND less than minivans . It's very important to recognize the word " category " is singular, and it is very important to recognize the significance of an " and " rather than an " or ." Of course it's true, as you say, that every other category has profits that are either greater than SUVs or less than minivans. That's absolutely true, but that's not what (C) is saying. If we read (C) carefully, it is saying that no single individual category has a profit that is simultaneously both greater than SUVs and less than minivans. In other words, there is no category that ranks between those two in terms of profit. This is absolutely true, because SUV are #2 and minivans are #3. Now, my friend, I want to consider how you addressed this question. Your opening comment was " I believe the question is wrong ." This could be construed as disrespectful. Think about the following scenario. Suppose, after you get your MBA, you are hired at some job. Suppose you observe something associated with the company that looks like an error to you. If you go into your boss's office and begin by saying " I believe this is wrong ," and then it turns out, as with this question, you misinterpreted something, think about the opinion this boss will have of you. Nobody else likes to be told " You are wrong ," and if someone say this and then it turns out to have no basis, it is as if that person insulted someone for no reason. If someone does this, other people's respect or that person will tend to drop off quickly. Hi Mike, Going through your comments on why C should be the answer. Isn't C an inference and not an assumption? What C says is something that can already be inferred from the information provided above.

mikemcgarry · Answer

Dear nayyarsidharth , I'm happy to respond.

As assumption is such a central part of argument that it can take on several roles. It certainly can be a strengthener, and it's negation can be a weakener. Now the question of "must be true" or "inference" is subtle. The last sentence of the argument, the conclusion, is: Tecumseh’s marketing analysts’ prediction of the three most profitable categories of vehicles in the coming year will be compact cars, minivans, and SUVs respectively . Notice that this is a prediction. Is this true? Do we know that this is true? In a CR argument, we have to assume that the evidence is true, but not necessarily the conclusions, especially if the conclusions are predictions. When the CR question is an assumption question, a strengthen question, or a weaken question, the implicit structure of the question assumes that the conclusion is not guaranteed, and our job is to find what would guarantee (or devastate) this uncertain conclusion. Because we don't know whether that prediction at the end is true, and want to find an assumption that would strengthen it in some way, (C) works, although admittedly, it has an unusual structure for an assumption, insofar as it shores up only one narrow part of the conclusion. In a " must be true " or " inference " question, the caveat is stated " assuming that the above states are true . . . " If this were the case, then we would know that the prediction in the final line is true--we could assume that as true. Then (C) also would also work, but the direction of logic would be different in those kinds of questions: rather than use (C) to support an uncertain conclusion, we would be using a certain conclusion to deduce (C). It's extremely important to appreciate how the nature of the prompt question shapes the way we are to understand the prompt argument and its conclusion. A lot of the confusion on this thread about " is it an assumption or an inference/prediction/must be true ?" comes from not appreciating the subtle shifts in logic caused by different prompt questions. Does all this make sense? Mike

In anticipation of the coming year, Tecumseh Autos, a national auto

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In anticipation of the coming year, Tecumseh Autos, a national auto

Prep Toolkit

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

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