Kitchen Corporation sells a variety of stoves and dishwashers.

Question

Kitchen Corporation sells a variety of stoves and dishwashers. Two years ago, the company introduced a line of refrigerators. The company lost money on sales of the refrigerator line in each of the last two years, and forecasts suggest that the refrigerator line will post stagnant revenues and slightly increasing costs. Therefore, Kitchen Corporation can increase profits by discontinuing the refrigerator line.

Which of the following, if true, most seriously weakens the argument?
A. Kitchen Corporation has designed a new model of its refrigerator that includes an icemaker, a feature that is considered important by many consumers.

B. Refrigerators have a higher average price than dishwashers or stoves.
 
C. Kitchen Corporation’s refrigerators are competitively priced compared to refrigerators from leading manufacturers.

D. Many customers prefer that all their kitchen appliances come from the same manufacturer.

E. Some machines that are used to manufacture refrigerators can also be used to manufacture stoves.

sm1510 · Accepted Answer

OFFICIAL EXPLANATION 
(1) Identify the Question
The word weakens in the question signals that this is a Weaken the Argument question.

(2) Deconstruct the Argument
Kitchen Corporation loses money on its recently added refrigerator line, and forecasts suggest this will continue. Therefore, to increase profits Kitchen Corporation should stop making refrigerators.

Here is one possible way to map the argument.

KC = stoves + dw

Added refrig but losing money

(3) State the Goal
The goal on a Weaken question is to cast doubt on the conclusion. What would make it is less likely that discontinuing the refrigerator line will increase profits?

(4) Work From Wrong to Right

(A) Just because Kitchen Corporation has a new refrigerator design with a desirable feature does not mean that the refrigerator line will become profitable. For example, the new icemaker feature could be costly to manufacture, resulting in lower profits even if customers like the new model more.

(B) Higher selling price for refrigerators than stoves or dishwashers does not imply anything about the relative or absolute profitability of those products, beyond what the argument already stated.

(C) This choice suggests that having an uncompetitive price is not the issue for Kitchen Corporation’s refrigerators. However, this choice, does not address the profitability of the refrigerator line.

(D) CORRECT. This answer suggests that having a refrigerator line may contribute to company profits beyond just the profits of the refrigerator line itself. If customers prefer all their kitchen appliances to come from the same brand, offering a refrigerator line increases Kitchen Corporation’s ability to sell stoves and dishwashers: not producing refrigerators could hurt sales of other appliances, decreasing profit overall.

(E) If anything, this answer strengthens the argument because it suggests that Kitchen Corporation might be able to use some of the machinery for other purposes if the refrigerator line were discontinued.

saghosh1 · Answer

"The company lost money on sales of the refrigerator line in each of the last two years". How would (D) change this now?
If customers preferred kitchen appliances from same manufacturer, then there would have been increased profits from start.

AnkithaSrinivas · Answer

from past 2 years , they were selling all the 3 . There must be something new to increase profit .

SHAAN1512 · Answer

This question seems to be of poor quality.

Scifick · Answer

Why not C ? If the price is already low then discounts won't help so it's weakning . And how is D correct

Abhishek_007 · Answer

Let me break it down for you:

The  Premise  of the question is : "The company has lost money on the refrigerator line for two years and forecasts suggest stagnant revenues and slightly increasing costs."
The  Conclusion  of the argument is : "Discontinuing the refrigerator line will increase profits."

Answer is (D) beacuse : It suggests that offering a complete line of kitchen appliances, including refrigerators, might drive sales of other products. Which impacts on good profits.

Why not (C) beacuse : Competitive pricing alone does not necessarily lead to profitability.

Therefore, (D) most seriously weakens the argument because it suggests that discontinuing the refrigerator line could negatively impact sales of other Kitchen Corporation products by not meeting customer preferences for a unified brand for all kitchen appliances.

Scifick · Answer

Actually I just realised I read the word discontinuing wrong as discounting  : | super silly mistake

tanishqgirotra · Answer

When marking d as the correct choice, aren't we assuming that all those "many customers" buy their kitchen appliances from Kitchen corporation?

DmitryFarberMPrep · Answer

No, we don't have to assume that. The issue is simply whether discontinuing an unprofitable product line will increase profits. It makes sense on the surface--if you're losing money on this product, why sell it? But if a significant number of consumers won't buy your OTHER products unless you also make refrigerators, then your overall profits may go down if you stop making refrigerators.

(Think of this in terms of a retail business. Some products are "loss leaders" that are not profitable in themselves but that bring in customers who then buy other things. If customers want to shop for groceries at a store that sells, say, apples and soda, then you'll want to sell those things at your grocery store even if they are unprofitable.)

VerbalBot · Answer

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Kitchen Corporation sells a variety of stoves and dishwashers.

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