Sales at a local sandwich shop have been declining steadily since a he

Question

Sales at a local sandwich shop have been declining steadily since a health food restaurant opened its doors for business on the same block three months ago. The owner of the sandwich shop concludes that the best way to raise sales back to prior levels is to offer special sandwich prices that compete with the low prices at the health food restaurant.

Which of the following assumptions helps to justify the owner’s conclusion?

A) Local consumers prefer the food at the sandwich shop to the food at the health food restaurant.

B) Sales at the sandwich shop reached an all-time high six months ago.

C) The sandwich shop’s prices are currently higher than those of a similar shop located in a neighboring town.

D) The sandwich shop does not currently offer any healthful food items.

E) The health food restaurant is running its special prices as a temporary promotion and will be raising its prices at the end of the year.

bkk145 · Answer

I got A by POE
A says that people prefer sandwich. If the owner lower price, there by eliminating one consideration for choosing shops, then people should come back.

All pther choices doesnt even fit.

FN · Answer

i get A as well..assumption is people will comeback because they like the taste of the sandwich

vd · Answer

A is the only plausible option.

i reached my answer by POE.

if this is the correct answer ...i can explain further...

thanks

gixxer1000 · Answer

I got A as well.

The local sandwich shop proposes to lower prices to compete with the health food shop. In order for this to work the customers still have to want to choose the local sandwich shop.

ex. The local shop sells sandwiches that taste like crap and people buy it because it's the only option. The health food shop moves in with good sandwiches. Even if the local shop reduces the price of the crap sandwiches people would still eat at the health food shop.

Yahsek · Answer

A here as well. If prices are equal, what other factor would other people consider when deciding which sandwich to purchase? Taste/quality, which consumers prefer local shop over health shop.

RyanDe680 · Answer

Well, after reading this, I assumed that the owner is lowering prices just to compete with the healthy sandwich shop, even though that's not what consumers are going after. I therefore eliminated B, C and E because they deal with sales and pricing. I focused on A and D and chose A because D doesn't show a significant enough reason as A does of why the sandwich owner would reach such a conclusion.

siddhans · Answer

Can someone please explain why E is incorrect???

fluke · Answer

E) The health food restaurant is running its special prices as a temporary promotion and will be raising its prices at the end of the year.
Although low prices could be the stimulus behind the customers move to health food restaurant, we can't be 100% sure of that. People may be going to health food restaurant for better food. If they are going for healthier food, then raising or reducing prices will have no effect in reinstating the earlier customer base in the sandwich shop.

A) Local consumers prefer the food at the sandwich shop to the food at the health food restaurant.
This statement says that people prefer food at sandwich shop, thus, there must be other factor that caused the reduction in customer. It could be prices. Thus, reducing prices can have effect.

siddhans · Answer

Okay, I see what you are saying but still not 100% satisfied...Doesnt E also partially say that people prefer food at sandwich shop and not at the healthy restaurant so if the sandwich shop reduces the price then because they make tasty sandwiches people will return back?? Sorry but I am a little confised :roll:

fluke · Answer

**********************************
E) The health food restaurant is 
running its special prices as a temporary promotion and 
will be raising its prices at the end of the year.
************************************

I don't think E says anything about sandwich shop or people's preference. It is just giving us information/fact about Health food restaurants. It says health food prices are low but will increase in future. That's it.

SyedSan · Answer

Sales at a local sandwich shop have been declining steadily since a health food restaurant opened its doors for business on the same block three months ago. The owner of the sandwich shop concludes that the best way to raise sales back to prior levels is to offer special sandwich prices that compete with the low prices at the health food restaurant.

Which of the following assumptions helps to justify the owner’s conclusion?
A) Local consumers prefer the food at the sandwich shop to the food at the health food restaurant.
B) Sales at the sandwich shop reached an all-time high six months ago.
C) The sandwich shop’s prices are currently higher than those of a similar shop located in a neighboring town.
D) The sandwich shop does not currently offer any healthful food items.
E) The health food restaurant is running its special prices as a temporary promotion and will be raising its prices at the end of the year.

If A is true(Local consumers prefer the food at the sandwich shop) then consumers are going to come back to sandwich shop anyway; why decrease price? A is not a necessary assumption to conclude  "the best way to raise sales back to prior levels is to offer special sandwich prices that compete with the low prices at the health food restaurant."

I think E is not necessary either but it comes closest.

rish2708 · Answer

I believe the health food is using low price not the special price.

Special price is used by local restaurant to counter their sales and regain competition.

Posted from my mobile device

jabhatta2 · Answer

The sandwich shop owner concludes that making his prices more competitive with the health food restaurant’s prices is the best way to counteract his declining sales. Since the validity of this conclusion depends on the assumption that pricing is the root cause of the declining sales, an assumption that explicitly defines the relationship between price and sales, or an assumption that eliminates an alternate cause for the declining sales, will help justify the owner’s logic.

(A) CORRECT. This assumption eliminates the possibility that the sandwich shop is losing business because people actually prefer the food at the health food restaurant to the food at the sandwich shop. This gives more credibility to the argument that the decline in sales is a result of pricing.

(B) Sales records from six months ago fail to provide any significant information about the relationship between price and the current decline in sales.

(C) While this could possibly provide evidence that the sandwich shop’s prices are higher than normal, it doesn’t prove a connection between price and the recent decline in sales. Also, the neighboring town could have its own set of market factors that are completely different from the factors affecting sales in the owner’s market.

(D) Rather than eliminating an alternate cause for the decline in sales, this could possibly offer an alternate cause. If the sandwich shop does not offer healthful food items, consumers may be opting for the healthier restaurant next door. This would certainly weaken the owner’s conclusion, not justify it.

(E) This information fails to establish a relationship between the owner’s pricing and the decline in sales.

Elite097 · Answer

KarishmaB   generis  dont we say preference is difference from actual? If they prefer it could still be a case they dont actually buy from non healthy restaurant so defending A is not seeming approporiate

GmatKnightTutor · Answer

Sales at a local sandwich shop have been declining steadily since a health food restaurant opened its doors for business on the same block three months ago. The owner of the sandwich shop concludes that the best way to raise sales back to prior levels is to offer special sandwich prices that compete with the low prices at the health food restaurant.

Which of the following assumptions helps to justify the owner’s conclusion?

A) Local consumers prefer the food at the sandwich shop to the food at the health food restaurant.

B) Sales at the sandwich shop reached an all-time high six months ago.

C) The sandwich shop’s prices are currently higher than those of a similar shop located in a neighboring town.

D) The sandwich shop does not currently offer any healthful food items.

E) The health food restaurant is running its special prices as a temporary promotion and will be raising its prices at the end of the year.

The passage talks about a sandwich shop that has lost business since a health food place recently opened nearby. The owner of the sandwich shop has an idea to get sales back up by basically selling sandwiches at prices that "compete" with the cheap prices at the health food restaurant.

We're asked to look for an assumption.

A) Local consumers prefer the food at the sandwich shop to the food at the health food restaurant.

(A) is your answer. Imagine if local consumers did NOT prefer the food at the sandwich shop to the food at the new restaurant. That would mean EVEN IF the prices at both places were competitive with each other, you're not going to increase your sales at the sandwich place. In a sense, why would people choose, for example, a less tasty meal at X if Y was offering a better meal at a competitive price?

A_Nishith · Answer

The passage talks about a sandwich shop that has lost business since a health food place recently opened nearby. The owner of the sandwich shop has an idea to get sales back up by basically selling sandwiches at prices that "compete" with the cheap prices at the health food restaurant.

We're asked to look for an assumption.

A) Local consumers prefer the food at the sandwich shop to the food at the health food restaurant.

(A) is your answer. Imagine if local consumers did NOT prefer the food at the sandwich shop to the food at the new restaurant. That would mean EVEN IF the prices at both places were competitive with each other, you're not going to increase your sales at the sandwich place. In a sense, why would people choose, for example, a less tasty meal at X if Y was offering a better meal at a competitive price?

Answer: A

rak08 · Answer

On reading you can assess that sandwich restaurant doesn't change anything else but prices and thinks he can compete with the health food restaurant
this means customers are price sensitive and thereby the reasons for their shift is not the taste but the pricing.
Hence A.

I got confused with C, however that comparison is irrelevant as it compares sandwich restaurants with other similar shops and not health food restaurant which is under question.
E- for a temporary promotion, you know the discount is temporary then why reduce the price as you can't just keep fluctuating the price rather when i know health food restaurant will eventually increase the price, its a short term issue i would probably address it differently.

thelastskybender · Answer

Don't you think that option A is still faulty? It should have been written in the past tense to be a correct answer.  GmatKnightTutor

Sales at a local sandwich shop have been declining steadily since a he

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

Sales at a local sandwich shop have been declining steadily since a he

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