A local hardware store is concerned that its sales will diminish when

Question

A local hardware store is concerned that its sales will diminish when a competing hardware store opens in the same area next month. However, it is actually more likely that the existing store’s sales will increase. Over the next few months, due to high demand for mixeduse residential and commercial buildings, over three times as many construction projects will be started in the area as were started over the past five years.

The argument above depends on which of the following assumptions?

(A) The managers of the new construction projects will purchase an equal amount of material from both hardware stores.

(B) The construction projects will require the purchase of materials that are sold at the existing hardware store.

(C) The materials sold at the existing store are higher in quality than those to be sold at the new hardware store.

(D) The area revitalization spurred by new mixed-use developments will encourage local residents to perform improvements on their own homes.

(E) The existing hardware store will lower its prices below those of its competitors to attract new customers.

This is a  CR Butler Question

Check the links to other Butler Projects:
 
  Data Sufficiency Butler  
  Problem Solving Butler  
  Reading Comprehension Butler

BongBideshini · Answer

A. The managers of the new construction projects will purchase an equal amount of material from both hardware stores. 
The existing store does not need a perfect 50-50 split to see its sales increase. Given that the volume of construction is skyrocketing to over three times the five-year total, the existing store could capture a minority share of the new business and still experience a massive net increase in sales. 
 
 B. The construction projects will require the purchase of materials that are sold at the existing hardware store. 
Let's apply the GMAT Negation Test. The construction projects will NOT require the purchase of any materials sold at the existing hardware store? The conclusion completely falls apart. With a new competitor opening next door, the existing store's sales would inevitably diminish. 
 
 C. The materials sold at the existing store are higher in quality than those to be sold at the new hardware store. 
While higher quality might help the existing store compete, it is not an assumption required for this specific argument. Even if you negate it, the conclusion still holds. 
 
 D. The area revitalization spurred by new mixed-use developments will encourage residents to perform improvements on their own homes. 
The author's argument specifically addresses the increase in sales to the commercial and residential "construction projects" themselves, not to residential improvement projects. 
 
 E. The existing hardware store will lower its prices below those of its competitors to attract new customers. 
Does it have to be true? Let's negate. The existing hardware store may not lower its prices below those of its competitors to attract new customers. Let's say the price is the same. Given that the volume of construction is skyrocketing to over three times the five-year total, the existing store could still capture some share of the new business and experience a massive net increase in sales. 
 
 Correct Answer: B

durant25 · Answer

Between B and C, since the argument says that the sales will dimish doesn't B convey the same thing? It says construction projects will require purchase, but the purchase can be less too.
In case of C, if the existing store is definitely of higher quality, then companies have to purchase from the existing store and not the new one.

AllisonBell · Answer

Great question! The conclusion of this argument is the second sentence:  it is actually more likely that the existing store’s sales will increase.  The opening sentence is a classic example of a Critical Reasoning counterpoint — a common way for a CR stimulus to start. When you see an introductory sentence or two followed by  However  or another pivot word, the author’s argument — and the part we want to focus on — typically follows the pivot.

Since the conclusion that  sales will increase  at the existing store is based on the premise that there will be  three times as many construction projects,  the argument assumes that the materials for those projects will be purchased at the existing store.

Keep in mind that an  assumption doesn’t have to make the argument perfect . Yes, it would be stronger for the argument if (B) said something like  all new materials will be purchased at the existing store.  But the key here is actually in  the task required by an assumption: it’s something that  must be true  in order for the argument to hold.

To test choice (B), we can  use the negation test:  what if the new projects  don’t  require purchases from the existing store? Then, the argument the existing store’s sales will increase completely falls apart. This proves that choice (B) is something that  must be true  for the conclusion to be valid. If sales are going to increase at the existing store, then at least some of the materials for these new projects will need to be purchased there.

Let’s compare that to choice (C). You’re right: a case could be made that choice (C) would strengthen the argument by making it more likely that materials at the existing store will be chosen for purchase. But does (C) have to be true in order for the conclusion to hold?

If materials at the existing store are  not  higher quality, people might still choose to purchase them for construction projects for a variety of reasons — maybe they’re cheaper, maybe this store has a favorable return policy, maybe it’s just habit. So the likelihood of sales at the existing store doesn’t depend on having higher quality materials. It just depends on materials being purchased there at all. That’s why (B) is correct here.

Ultimately, this question is a great example of  the difference between a Strengthen question and an Assumption question . On a Strengthen question, we just need to make the conclusion more likely, but  for an Assumption question, we need to find a statement that has to be true in order for the argument to hold.

It’s worth practicing the difference between these two related question types! That’s why we dig deep into the distinction in our course. You can check out a free CR lesson as part of our   Free Trial Class  .

Best,

Bunuel · Answer

Kaplan Official Explanation

STEP 1: IDENTIFY THE QUESTION TYPE

The question directly asks for an assumption, making this an Assumption question.

STEP 2: UNTANGLE THE STIMULUS

Despite the local hardware store’s concerns about a competitor’s impact on sales, the author concludes that the store’s sales are actually likely to increase. To support this claim, the author points out a boom of construction projects in the area.

STEP 3: PREDICT THE ANSWER

A boom in construction projects might seem like a boon for a hardware store. However, what if those construction projects require special materials that the local store cannot provide? Or what if the construction crews already own the equipment they need and have no need to go shopping for new stuff? Or maybe the construction companies have preexisting contracts with national hardware chains and don’t buy from local stores at all. In that case, the local store would gain no benefit from these new projects. For this argument to work, the author must assume that the construction projects will provide sales opportunities for the local store.

STEP 4: EVALUATE THE CHOICES

(B) is correct. If the construction projects don’t need anything the local store is selling, then the local store will gain nothing. The author must assume the new projects will lead to sales.

(A) is not necessary. The local store and the incoming competition don’t have to have equal sales. If the construction projects lead to a large enough increase in overall sales, then the local store could increase sales even it takes in a smaller percentage of overall sales.

(C) is irrelevant. There’s no guarantee that higher quality would lead to higher sales. In addition, there are many scenarios under which the local store could increase sales even if its materials were of equal or lesser quality to those sold by the competitor.

(D) is not necessary. While an increase in personal home improvement projects might well benefit the hardware store, they wouldn’t be needed if the new mixed-use developments have the anticipated demand for the store’s products.

(E) is not necessary. While lower prices might be a great way to boost sales, there are many other reasons sales could increase—including those major construction projects that the author uses as evidence.

Answer: B

MakB · Answer

Since it is mentioned in the last stem that too many new projects are coming up as compared to last 5 years, so basically the requirement for hardware items will significantly increase.
The competition of the 2 stores would have led to decrease in sales if the population to which it is serving remained constant. However, here the demand is increasing and hence, sales will not get affected, but infact increase to meet the demand.
Also, since the old hardware store has been there for a long time, it must be equipped will all the inventory that might be required, as compared to the new.

Now why not C?
Because Quality of material is secondary to the demand. Moreover, nothing of that sort is mentioned in the question. So rule out.
Why not A?
Because it is practically not possible for contractors to purchase equal from both stores.
Why not D?
While it might increase the sales to a little bit if current population renovate, but that is not significant. Also, they MIGHT consider, not sure. Rule out.
Why not E?
Well, price changes might be profitable, but again, for it to hold true, various other assumptions have to come in play. So rule out as it is very superficial.

Hope it helps

durant25

Between B and C, since the argument says that the sales will dimish doesn't B convey the same thing? It says construction projects will require purchase, but the purchase can be less too.
In case of C, if the existing store is definitely of higher quality, then companies have to purchase from the existing store and not the new one.

vasu1104 · Answer

local hardware store is concerned that when new competing store opens next month, their sales will diminish.
but over the next few months, over three times as many construction projects will be started in area as were started over the past five years.

conclusion= existing stores sales will increase.

so because there will be more num of projects coming up, the old stores income will go up. means its assuming that new projects will go to the old store to purchase stuff or bold store will have all the stuff that these projects requires.

A this says managers will split the purchase. but to do that both stores need to have material available. the entire conclusion is based on that fact. and this choice doesnt tell anything about that. reject.
B yes, author assumes that old store will have all materials required for these new projects and due to that all these projects will go to old store hence increase in sales. but when we negate this, it says that old store wont have materials required for projects. so this is correct one. keep. 
C not concerned about the high quality at all. out.
D this is out of scope here.
E this talks about getting new customers outside of new construction projects. irrelevant here, out.

choice B

A local hardware store is concerned that its sales will diminish when

Prep Toolkit

Top 5 GMAT Debrief Videos

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

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

­A local hardware store is concerned that its sales will diminish when

Prep Toolkit

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

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

A local hardware store is concerned that its sales will diminish when