President of Central Supply Company: Profits are at an all-time low th

Question

President of Central Supply Company: Profits are at an all-time low this fiscal year because of decreased demand for our products. If this situation continues, the company may have to declare bankruptcy. So it is important to prevent any further decrease in profits. Consequently, the only options are to reduce planed expansion or to eliminate some less profitable existing operations.

Which one of the following most accurately describes a flaw in the company president’s reasoning?

(A) It presumes without giving justification that survival of the company has been a good thing.

(B) It does not take into account that there are alternatives to declaring the bankruptcy.

(C) It presumes without giving justification that only decreased demand can ever be the cause of decreased profits.

(D) It does not allow for the possibility that profits will decrease only slightly during the next fiscal year.

(E) It does not take into account that there may be other ways to stop the decrease in profits.

yashikaaggarwal · Answer

I am slightly confused between E and C. Can you please elaborate the reasoning?

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abhineetmanu · Answer

Here the The  problems: decrease in profits 
and  the task is to stop decrease in profit 
and proposed  Solution is reduce planed expansion or to eliminate some less profitable existing operations.

so the relationship is 
to prevent any further decrease in profits--> the only options are to reduce planed expansion or to eliminate some less profitable existing operations.

We have to look for an answer which says that author has ignored some other alternative ways to meet the target i.e to stop decrease in profit .

(A) It presumes without giving justification that survival of the company has been a good thing.-  Incorrect: Out OF Scope

(B) It does not take into account that there are alternatives to declaring the bankruptcy.-  Incorrect: Out of Scope

(C) It presumes without giving justification that only decreased demand can ever be the cause of decreased profits.-  Incorrect- Its a fact given in the argument and we have to assume it as correct fact. Fact presented in an argument cannot be considered Flaw.

(D) It does not allow for the possibility that profits will decrease only slightly during the next fiscal year.-  Incorrect: Irrelevant in present context

(E) It does not take into account that there may be other ways to stop the decrease in profits.-  Correct. This is exactly what we are looking for, a view that say there may be some alternate way to stop the decrease in profits.

MeherAbhijeet · Answer

Can anyone help me understand why E? 
Since it is mentioned in the argument that the “only options” are reducing or eliminating operations. 
Can we question this part ? ( i.e there are other options )

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mialanknox · Answer

TTP says that we need to pay attention to key words to identify what is the conclusion. Key words like therefore, hence, nevertheless, consequently, henceforth, etc.

Conclusions are point of view / opinion. 
Whereas everything else i.e. background, premise, evidence are facts (always) in GMAT. Therefore, an option that weakens the argument is not going to be the correct.

In this passage, only option E was attacking the conclusion. Option C was actually attacking the premise - decrease in demand doesn't always lead to decrease in profits - this is not correct.

Hope it helps!

Queen776 · Answer

Your explanation includes a contradictory point. If one portion of the argument must be considered fact how is one to determine which portion should be and should not be considered fact. There are two major false presumptions and you are accepting one and declining the other arbitrarily.

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Dbrunik · Answer

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MartyMurray  can you help here? 
No clue how I answer this

siddhantvarma · Answer

Let's understand the argument. 
Premise: Profits are at an all-time low due to decreased demand. 
Consequence of the premise: If this continues, bankruptcy may be necessary
Goal: Prevent further profit decrease
Conclusion/Argument: The only options are to reduce planned expansion or eliminate less profitable operations

What could be the flaw here? The President concludes that the  only  options are to reduce planned expansion or eliminate less profitable operations. We know both of these could be one of many ways to reduce profits, but we have no evidence that these are the  only  way to reduce profits.

Let's look at the answer choices:

(A) It presumes without giving justification that survival of the company has been a good thing.
Survival of the company is irrelevant to the argument. The argument doesn't rely on justifying whether the company's survival is good or bad => Eliminate

(B) It does not take into account that there are alternatives to declaring the bankruptcy.
The president acknowledges alternatives to bankruptcy by suggesting actions to prevent it. We're interested in finding a gap in the president's argument regarding how to decrease profits and not bankruptcy => Eliminate.

(C) It presumes without giving justification that only decreased demand can ever be the cause of decreased profits.
While the president attributes current low profits to decreased demand, the argument doesn't claim this is the only possible cause of decreased profits in general. We have to take the decrease demand in this case as the core reason for lower profits, since it's a stated premise that has to be taken as true => Eliminate

(D) It does not allow for the possibility that profits will decrease only slightly during the next fiscal year.
The argument isn't based on assumptions about the magnitude of future decreases - it simply states that any further decrease should be prevented. Again, this answer choice is irrelevant wrt the focus of the argument => Eliminate

(E) It does not take into account that there may be other ways to stop the decrease in profits.
This identifies the core flaw that also aligns with our pre-thinking. The president concludes that only two specific options exist (reduce expansion or eliminate operations), but provides no justification for why these are the only possibilities. There could be many other ways to address decreasing profits - cutting costs, developing new products, marketing differently, adjusting pricing, etc.

The answer is (E) - the argument doesn't take into account that there may be other ways to stop the decrease in profits.

Vibhatu · Answer

Why not C? please give the official solution !! thanks in advance  Bunuel

President of Central Supply Company: Profits are at an all-time low th

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