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605-655 (Medium)|   Resolve Paradox|         
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 07:16
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A The number of goats on each farm does not explain why profit is lower per goat.

B The loan is tied to how the goats were purchased rather than the breed's profitability itself.

C Missing a volume bonus results from smaller herd size, not from each goat earning less profit.

D A shorter lifespan does not directly explain lower monthly profit per adult goat.

E Right answer. The extra feed costs outweigh the additional milk revenue, reducing net profit per goat.

Answer E
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 07:27
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A. Incorrect as count doesent matter here. As given in the passage, profit is measured in per adult female goat per month so this doesent explain it
B. Incorrect as one can say that the loan payment is a general cost to the entire farm and wont affect the per goat profit we need. It is also stated that 30% of the monthly revenue is given for the loan, but it doesent really overcome difference caused by the double production output by the goat.
C. Incorrect as again the profit is checked per female goat. Also, we can say that a modest bonus here doesent really overcome the double output difference.
D. Incorrect as the profit is checked monthly and lifespan conditions wont be considered for such a short time interval
E. Correct as this directly affects the monthly profit. An increase in the feed cost causes profit to be lower than the traditional goat profit

E.
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 07:29
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Conclusion: unexpected pattern about the performance of newly breed of goat

Evidence
1. New breed of goat -> producing 2x milk/month compared to Traditional
2. But, New's net profit per adult female goat/month < Traditional, while at the same per-liter prices

Assumption/Missing link: higher production volume (2x) is supposed to drive higher net profit for newly breed of goat.
What if there is another factor that impacts the net profit other than production volume?

Possible answer: E. Newly breed need supplemental food, whose cost is greater than traditional
Why? Breaking the assumption that, other than production volume, the cost of supplemental food influences the net profit number.

Why others incorrect
A. # of female goats as comparison not aligned with the conclusion
B. Can be trapped. Subsidized loan program can lower the net profit, but it is a fixed monthly amount. Not variable per volume.
C. Bonus for traditional, not aligned with the evidence argument
D. Adaptation to local climate is not aligned with the evidence argument

Bunuel
In a mountainous region where small-scale dairy farming has been practiced for centuries, agricultural extension officers recently documented an unexpected pattern: farms that had adopted a newly introduced breed of goat—one capable of producing roughly twice as much milk per month as the traditional local breed—reported substantially lower net profits per adult female goat per month than farms that continued raising the traditional breed, despite selling their milk at identical per-liter prices.

Which of the following, if true, does the most to explain the surprising result in the passage above?

(A) Farms raising the traditional breed have, on average, nearly twice as many female goats as those that adopted the newly introduced breed, resulting in comparable total milk output across the two groups.

(B) Most farms that have adopted the newly introduced breed have done so through a subsidized loan program; many are still repaying those loans, at a fixed monthly amount approximately equal to thirty percent of their aggregate monthly milk revenue.

(C) Regional dairy cooperatives have begun offering modest volume bonuses to farms producing above a threshold that most traditional-breed farms meet but that most farms with the newly introduced breed, having smaller herds, do not.

(D) The newly introduced breed is neither well adapted to the local climate nor robust against locally prevalent bacterial diseases, so it lives just under half as long after reaching maturity, on average, as does the traditional local breed.

(E) To sustain its elevated milk output, the newly introduced breed requires imported supplemental feed, whose cost per animal is slightly greater than the additional milk revenue generated by the new breed over the traditional local breed.

 


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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 07:32
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A The total number of goats each farm owns does not affect the profit calculated for each goat.

B Loan repayments hurt earnings, but they are a temporary financing cost instead of an operating disadvantage of the breed.

C Larger farms may collect bonuses, yet that difference comes from herd size rather than the goats themselves.

D Poor adaptation to the local environment is a drawback, but it is not the strongest explanation for lower monthly profit. E is better.

E Correct answer. The increased feeding expense is greater than the extra income from higher milk production.

The answer is E
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 07:48
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A Twice as many goats doesn't fix the per goat monthly number.

B Loans aren't production costs.

C Bonuses are for the whole farm, not each goat's monthly profit.

D Short life means more replacements over time, but that doesn't make this month's milking less profitable.

E Best option. Feed costs eat up more than the extra milk pays for, month after month.

The correct answer is E
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 07:49
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  • New breed of goat = double amount of milk compared to traditional breed.

  • Despite more milk, farms with new breed report lower net profit.

  • Price of milk is identical.

A-)Number of new breed of goat 100 --> Milk 200; Number of traditional breed of goat = 200 ----> Milk 200. Does not explain lower net profit. (Not sufficient)
B-)New breed farmers earn 200 --> from 200 milk; Traditional breed farmers earn 100 --->from 100 milk 200*%70= 140 (60 goes to loan) does not explain the paradox (Not sufficient)
C-) New breed farmers have 70 sheep ---> 140 milk ---> 140 dollars; traditional breed farmers have 100 sheep --> 100 milk ---> 100 dollars + 20 dollars bonus. New breed farmers profit > Traditional breed farmer profit (Not sufficient)
D-)Traditional breed lives 2 months ---- 1 month 100 milk----> 100 dollars profit in a month ; New breed lives 1/2 month ---->1/2 month 100 milk ---->100 dollars profit (Same profit does not explain paradox - Not sufficient)
E-)If cost of new breed is greater than revenue it creates compared to traditional breed ----> lower net profit
Ans. (E)
IMO
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 09:21
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A B C D does not explain the paradox

E is the answer as higher cost than revenue => lower net credit loss
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 09:27
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Passage analysis,
Unexpected pattern observed.
Milk production capabilty/ goat/monthnet profit/ goat /monthper litre price
Traditional breed farmsxyz
new breed farms2x<<<yz

Note that all concerned parameters are given for adult female goat.

Question type: Logical reasoning

Answer choice analysis,
A. We are not concerned about total profit. Author talks about per goat topic. So irrelevant.
B. Notice how the pattern is unexpected. So loan factor can not be the case and we are talking about substantial profit difference. And this do not give any conclusive info to compare with the traditional breed. Logic is in the same line but inconclusive.
C.Author is talking about adult female goats. So out of context.
D. Passage concerned about profit per goat per month. So, this option is incorrect.
E. This is the correct answer. This option clearly shows not only how per goat cost is in general higher for traditional goats but also clarifies that the amount is bigger than revenue generated. Decreasing the profit substantially.

Bunuel
In a mountainous region where small-scale dairy farming has been practiced for centuries, agricultural extension officers recently documented an unexpected pattern: farms that had adopted a newly introduced breed of goat—one capable of producing roughly twice as much milk per month as the traditional local breed—reported substantially lower net profits per adult female goat per month than farms that continued raising the traditional breed, despite selling their milk at identical per-liter prices.

Which of the following, if true, does the most to explain the surprising result in the passage above?

(A) Farms raising the traditional breed have, on average, nearly twice as many female goats as those that adopted the newly introduced breed, resulting in comparable total milk output across the two groups.

(B) Most farms that have adopted the newly introduced breed have done so through a subsidized loan program; many are still repaying those loans, at a fixed monthly amount approximately equal to thirty percent of their aggregate monthly milk revenue.

(C) Regional dairy cooperatives have begun offering modest volume bonuses to farms producing above a threshold that most traditional-breed farms meet but that most farms with the newly introduced breed, having smaller herds, do not.

(D) The newly introduced breed is neither well adapted to the local climate nor robust against locally prevalent bacterial diseases, so it lives just under half as long after reaching maturity, on average, as does the traditional local breed.

(E) To sustain its elevated milk output, the newly introduced breed requires imported supplemental feed, whose cost per animal is slightly greater than the additional milk revenue generated by the new breed over the traditional local breed.

 


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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 10:01
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paradox:

new breed gives 2x milk, same selling price, but lower net profit.

need a reason why costs > extra revenue.

a) talks about herd size, but profit is per goat. irrelevant.

b) loan payments. possible, but not directly due to the breed.

c) misses volume bonus. doesn't explain lower per goat profit well.

d) shorter lifespan. long-term issue, not monthly profit.

e) extra feed costs more than the extra milk revenue. directly explains why profit per goat is lower despite more milk.


ans: e

Bunuel
In a mountainous region where small-scale dairy farming has been practiced for centuries, agricultural extension officers recently documented an unexpected pattern: farms that had adopted a newly introduced breed of goat—one capable of producing roughly twice as much milk per month as the traditional local breed—reported substantially lower net profits per adult female goat per month than farms that continued raising the traditional breed, despite selling their milk at identical per-liter prices.

Which of the following, if true, does the most to explain the surprising result in the passage above?

(A) Farms raising the traditional breed have, on average, nearly twice as many female goats as those that adopted the newly introduced breed, resulting in comparable total milk output across the two groups.

(B) Most farms that have adopted the newly introduced breed have done so through a subsidized loan program; many are still repaying those loans, at a fixed monthly amount approximately equal to thirty percent of their aggregate monthly milk revenue.

(C) Regional dairy cooperatives have begun offering modest volume bonuses to farms producing above a threshold that most traditional-breed farms meet but that most farms with the newly introduced breed, having smaller herds, do not.

(D) The newly introduced breed is neither well adapted to the local climate nor robust against locally prevalent bacterial diseases, so it lives just under half as long after reaching maturity, on average, as does the traditional local breed.

(E) To sustain its elevated milk output, the newly introduced breed requires imported supplemental feed, whose cost per animal is slightly greater than the additional milk revenue generated by the new breed over the traditional local breed.

 


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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 17 Jul 2026, 10:08
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My ans is E)

This is an resolve paradox question- we need to find why even if output is doubled, profitability has decreased- one reason could be production cost has increased as this breed is costlier to maintain.

A) This does not help in resolving but make the paradox worse by telling that output is comparable still- Eliminate.
B) Even if 30% of doubled output (doubled revenue) is loan repayment doesn't indicate that profitability decreases- Eliminate.
C) Bonus is linked to outputs and not size of herds hence it is unclear- Eliminate
D) Life of new breed is shorter, this could be a reason for lower profits over the years but it does not directly impacts the low profitability- Eliminate
E) This directly explains why additional revenue is not enough for additional costs- CORRECT.
Bunuel
In a mountainous region where small-scale dairy farming has been practiced for centuries, agricultural extension officers recently documented an unexpected pattern: farms that had adopted a newly introduced breed of goat—one capable of producing roughly twice as much milk per month as the traditional local breed—reported substantially lower net profits per adult female goat per month than farms that continued raising the traditional breed, despite selling their milk at identical per-liter prices.

Which of the following, if true, does the most to explain the surprising result in the passage above?

(A) Farms raising the traditional breed have, on average, nearly twice as many female goats as those that adopted the newly introduced breed, resulting in comparable total milk output across the two groups.

(B) Most farms that have adopted the newly introduced breed have done so through a subsidized loan program; many are still repaying those loans, at a fixed monthly amount approximately equal to thirty percent of their aggregate monthly milk revenue.

(C) Regional dairy cooperatives have begun offering modest volume bonuses to farms producing above a threshold that most traditional-breed farms meet but that most farms with the newly introduced breed, having smaller herds, do not.

(D) The newly introduced breed is neither well adapted to the local climate nor robust against locally prevalent bacterial diseases, so it lives just under half as long after reaching maturity, on average, as does the traditional local breed.

(E) To sustain its elevated milk output, the newly introduced breed requires imported supplemental feed, whose cost per animal is slightly greater than the additional milk revenue generated by the new breed over the traditional local breed.

 


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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 15 Aug 2026, 00:45
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Hi MartyMurray, I was confused between B and E because of the word "substantially" in the passage. How come E can be the answer?
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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 15 Aug 2026, 08:37
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Hi gullyboy09,

Good instinct to lock onto the wording, but here the two "slightly / substantially" phrases are measuring different things, and that's the whole trap.

What "slightly greater" in E is actually compared to. E says the feed cost is slightly greater than the additional milk revenue the new breed brings in over the traditional breed. That additional revenue is not small - the new breed produces twice as much milk, so the extra revenue equals the traditional breed's entire per-goat revenue. So "slightly greater than the additional revenue" means the feed eats up all of that extra revenue and a bit more. Net effect: new-breed profit drops just below the traditional breed's. That is exactly the reversal the passage reports.

Why "slightly" can still read as "substantially" in profit terms. Profit is a thin margin - revenue minus costs. A cost that wipes out the whole extra revenue and then digs slightly into the base profit can be a small number in dollars but a large share of the profit. So "slightly greater cost" and "substantially lower profit" are fully compatible.

Now run B's numbers - this is the clincher. Call the traditional per-goat revenue R, so the new breed earns 2R. B takes 30% of that as loan repayment: 0.7 x 2R = 1.4R. That's still higher than the traditional breed's R. So B doesn't just fail to explain a "substantial" drop - it leaves the new breed more profitable. B points the wrong way entirely.

Therefore, E is the only choice that even makes new-breed profit lower. On a "does the most to explain" question, that settles it.

Quick gut-check on margins: if you sell something for $10 that costs you $9, your profit is $1. Add just $0.50 of cost - "slight" - and profit falls to $0.50, a 50% drop. Small cost, big profit swing. That's the mechanism in E.

Answer: E

gullyboy09
Hi MartyMurray, I was confused between B and E because of the word "substantially" in the passage. How come E can be the answer?
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Hi egmat, kindly request you to not reply to my queries. You use AI and doesn't even read it before posting. I wish someone can block you here.

In your own example, if $9 is cost for tradition, and 9.5 for new breed, its not slightly above, its more than 5%, not just slightly above.

In a mountainous region where small-scale dairy farming has been practiced for centuries, agricultural extension officers recently documented an unexpected pattern: farms that had adopted a newly introduced breed of goat—one capable of producing roughly twice as much milk per month as the traditional local breed—reported substantially lower net profits per adult female goat per month than farms that continued raising the traditional breed, despite selling their milk at identical per-liter prices.
egmat
Hi gullyboy09,

Good instinct to lock onto the wording, but here the two "slightly / substantially" phrases are measuring different things, and that's the whole trap.

What "slightly greater" in E is actually compared to. E says the feed cost is slightly greater than the additional milk revenue the new breed brings in over the traditional breed. That additional revenue is not small - the new breed produces twice as much milk, so the extra revenue equals the traditional breed's entire per-goat revenue. So "slightly greater than the additional revenue" means the feed eats up all of that extra revenue and a bit more. Net effect: new-breed profit drops just below the traditional breed's. That is exactly the reversal the passage reports.

Why "slightly" can still read as "substantially" in profit terms. Profit is a thin margin - revenue minus costs. A cost that wipes out the whole extra revenue and then digs slightly into the base profit can be a small number in dollars but a large share of the profit. So "slightly greater cost" and "substantially lower profit" are fully compatible.

Now run B's numbers - this is the clincher. Call the traditional per-goat revenue R, so the new breed earns 2R. B takes 30% of that as loan repayment: 0.7 x 2R = 1.4R. That's still higher than the traditional breed's R. So B doesn't just fail to explain a "substantial" drop - it leaves the new breed more profitable. B points the wrong way entirely.

Therefore, E is the only choice that even makes new-breed profit lower. On a "does the most to explain" question, that settles it.

Quick gut-check on margins: if you sell something for $10 that costs you $9, your profit is $1. Add just $0.50 of cost - "slight" - and profit falls to $0.50, a 50% drop. Small cost, big profit swing. That's the mechanism in E.

Answer: E


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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 15 Aug 2026, 10:47
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Hi gullyboy09,

Taking the example first. $9 to $9.50 is a 5.5% rise in cost, and yes, that is technically more than 5%. But the example was not making a claim about how big the cost increase is. The example was showing what a small cost does to a thin margin: profit falls from $1 to $0.50, a 50% drop for a 5.5% increase in cost. I.e. a small movement in cost, large movement in profit. That is the mechanism, and 5.5% would still be considered a slight rise by any ordinary reading of the word.

More importantly, that is not the comparison E is making. E does not compare the new breed's feed cost to the traditional breed's cost. It compares the feed cost to the additional milk revenue the new breed generates over the traditional breed. The new breed gives twice the milk at the same price per litre, so that additional revenue equals the traditional breed's entire per-goat revenue. A feed cost "slightly greater" than that (the additional revenue) wipes out all of the extra revenue and then cuts into the profit that would've been made with just traditional goats. Ultimately, per adult female goat per month, profit ends up lower. That is precisely the result the passage reports.

B moves the other way. Revenue 2R, minus 30% for the loan, leaves 1.4R, still above the traditional breed's R. It cannot explain a drop of any size, substantial or otherwise.

On the AI point: we do use AI, and we use it for formatting. The reasoning in that post was worked out and typed by the person posting it, then run through AI to make it cleaner to read. It is read (by me, the poster) before it goes up.

If you would rather wait for MartyMurray on this one, that is entirely fair and you are welcome to. The answer is E, and I am confident his explanation will land in the same place.

gullyboy09
Hi egmat, kindly request you to not reply to my queries. You use AI and doesn't even read it before posting. I wish someone can block you here.

In your own example, if $9 is cost for tradition, and 9.5 for new breed, its not slightly above, its more than 5%, not just slightly above.

In a mountainous region where small-scale dairy farming has been practiced for centuries, agricultural extension officers recently documented an unexpected pattern: farms that had adopted a newly introduced breed of goat—one capable of producing roughly twice as much milk per month as the traditional local breed—reported substantially lower net profits per adult female goat per month than farms that continued raising the traditional breed, despite selling their milk at identical per-liter prices.

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GMAT Club World Cup 2026 (Day 9): In a mountainous region where small 15 Aug 2026, 19:22
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Honestly I don’t know that it is better with the AI formatting because so many people are anti-ai these days. The excessive formatting AI adds is increasing the post length and makes it less helpful.

I would perhaps instruct A.I. to make it brief.


egmat
Hi gullyboy09,

Taking the example first. $9 to $9.50 is a 5.5% rise in cost, and yes, that is technically more than 5%. But the example was not making a claim about how big the cost increase is. The example was showing what a small cost does to a thin margin: profit falls from $1 to $0.50, a 50% drop for a 5.5% increase in cost. I.e. a small movement in cost, large movement in profit. That is the mechanism, and 5.5% would still be considered a slight rise by any ordinary reading of the word.

More importantly, that is not the comparison E is making. E does not compare the new breed's feed cost to the traditional breed's cost. It compares the feed cost to the additional milk revenue the new breed generates over the traditional breed. The new breed gives twice the milk at the same price per litre, so that additional revenue equals the traditional breed's entire per-goat revenue. A feed cost "slightly greater" than that (the additional revenue) wipes out all of the extra revenue and then cuts into the profit that would've been made with just traditional goats. Ultimately, per adult female goat per month, profit ends up lower. That is precisely the result the passage reports.

B moves the other way. Revenue 2R, minus 30% for the loan, leaves 1.4R, still above the traditional breed's R. It cannot explain a drop of any size, substantial or otherwise.

On the AI point: we do use AI, and we use it for formatting. The reasoning in that post was worked out and typed by the person posting it, then run through AI to make it cleaner to read. It is read (by me, the poster) before it goes up.

If you would rather wait for MartyMurray on this one, that is entirely fair and you are welcome to. The answer is E, and I am confident his explanation will land in the same place.

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Let me pitch in...
You can eliminate B more convincingly than accept E, so let us look why B is not the correct answer.
1. The statement does not add up mathematically. Even though there is a drop in profit due to paying back of loan, it is not enough to result in loss. For each liter at say $1, traditional farms earn $1, while the new ones earn $1.4 ( 2 litres at $0.7)
2. Next reason,( although official explanation does not talk of).. In the para, we talk of all the farms that have adopted to new brees, with no exceptions. But in option B, we use word MOST, so it leaves a gap for why others that have not taken loan are also facing loss.

Now getting back to E..
You are absolutely correct on the word 'substantially' and have a very valid point. E is the answer because there is no other better option. Surely E could have been better worded and challenging.
gullyboy09
Hi MartyMurray, I was confused between B and E because of the word "substantially" in the passage. How come E can be the answer?
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