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30 Sep 2011, 06:37
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C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
5%
(low)
Question Stats:
90% (01:25) correct
10%
(01:44)
wrong
based on 1870
sessions
History
Date
Time
Result
Not Attempted Yet
The Plexis Corporation, a leading computer chip manufacturer, is currently developing a new chip, which is faster and more efficient than any computer chip currently in use. The new chip will be released for sale in twelve months. Plexis’ market research has shown that initial sales of the new chip would be maximized by starting to advertise it now, but the company has decided to wait another six months before doing so.
Which of the following, if true, provides the Plexis Corporation with the best reason for postponing advertising its new chip?
(A) Some computer users are reluctant to purchase new computer products when they are first released.
(B) The cost of an advertising campaign capable of maximizing initial sales of the new chip would be no greater than campaigns previously undertaken by Plexis.
(C) Advertising the new chip now will significantly decrease sales of Plexis’ current line of computer chips.
(D) Plexis’ major rivals in the computer chip manufacturing business are developing a chip with capabilities that are comparable to those of Plexis’ new chip.
(E) Taking full advantage of the capacities of the new chip will require substantial adjustments in other segments of the computer industry
Which of the following, if true, provides the Plexis Corporation with the best reason for postponing advertising its new chip?
(A) Some computer users are reluctant to purchase new computer products when they are first released.
(B) The cost of an advertising campaign capable of maximizing initial sales of the new chip would be no greater than campaigns previously undertaken by Plexis.
(C) Advertising the new chip now will significantly decrease sales of Plexis’ current line of computer chips.
(D) Plexis’ major rivals in the computer chip manufacturing business are developing a chip with capabilities that are comparable to those of Plexis’ new chip.
(E) Taking full advantage of the capacities of the new chip will require substantial adjustments in other segments of the computer industry
I got the question right. However, I would like to hear your thoughts on why (E) is wrong. My reasoning with (E) goes like this:
The Plexis corp. is waiting for major changes in other segments of the computer industry that are expected in 6 months. For example, the new chip might have a feature that is not supported by current motherboards. But new motherboards will be announced in 6 months. So the Plexis Corp. decided to wait for that announcement. Had they decided not to wait, it would be useless to market the chip (because, as I have said, the new feature is yet to be supported by motherboards), and the advertisement campaign would result in wasted money.
Any thoughts?
The Plexis corp. is waiting for major changes in other segments of the computer industry that are expected in 6 months. For example, the new chip might have a feature that is not supported by current motherboards. But new motherboards will be announced in 6 months. So the Plexis Corp. decided to wait for that announcement. Had they decided not to wait, it would be useless to market the chip (because, as I have said, the new feature is yet to be supported by motherboards), and the advertisement campaign would result in wasted money.
Any thoughts?
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24 Jul 2017, 11:48
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Rocket7
shoumkrish
Dear Rocket7 & shoumkrish,
I'm happy to respond.
Here's the prompt:
The Plexis Corporation, a leading computer chip manufacturer, is currently developing a new chip, which is faster and more efficient than any computer chip currently in use. The new chip will be released for sale in twelve months. Plexis’ market research has shown that initial sales of the new chip would be maximized by starting to advertise it now, but the company has decided to wait another six months before doing so.
Which of the following, if true, provides the Plexis Corporation with the best reason for postponing advertising its new chip?
We know that the new chip will be faster & more efficient than anything currently available. It will be ready in 12 months.
(C) Advertising the new chip now will significantly decrease sales of Plexis’ current line of computer chips.
Suppose this is 100% true. Then we know for sure that Plexis will lose money now. This is a clear and unambiguous reason not to advertise now.
(D) Plexis’ major rivals in the computer chip manufacturing business are developing a chip with capabilities that are comparable to those of Plexis’ new chip.
Suppose this is 100% true. What do we know? When will these other manufacturers start to advertise? We don't know. When will these competing product be release for sale? before or after 12 months from now? We don't know. If these other manufacturers found out about Plexis' new chip, what would their response be? Would they be able to mimic what is great about the Plexis chip? We don't know.
There's a ton that we don't know about (D). Yes, we could imagine some scenarios in which this also would be a clear reason to delay the advertising, but other readings don't support that conclusion. This is vague and suggestive, leaving a lot of room in which we can read things--highly characteristic of GMAT CR trap answers! This is not a tight clear unambiguous answer. Choice (C) is a much much stronger answer.
That was part of my analysis. I will also say, Rocket7 & shoumkrish, it would be an exceptionally good idea if you read the business tech news regularly. Designing a computer chip is not like designing, say, a T-shirt: it's not as if we can add new features more or less on a whim. The kind of breakthrough that leads to a faster and more efficient chip is a major R&D achievement requiring sophisticated science and engineering. Simply the non-technical general information that would appear in an ad, say, the information that the new Plexis chip can operate at XX speed, would give any competitor zero information about how Plexis was able to achieve this breakthrough. Once the Plexis chips are for sale and the R&D departments of competitors can buy the chips and analyze them, then that's the point at which copy-cat efforts might begin.
Students often vastly underestimate the importance of real world considerations in GMAT CR. See this blog:
GMAT Critical Reasoning and Outside Knowledge
Does all this make sense?
Mike
General Discussion
30 Sep 2011, 06:50
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Here is my opinion -
E does not say when the substantial changes are going to take place. For all we know it might take 2 years.
E does not say when the substantial changes are going to take place. For all we know it might take 2 years.
