Sol Citrus, a small orchard that produces only organic citrus fruit

Question

Sol Citrus, a small orchard that produces only organic citrus fruit, has faced new competition ever since Mega Citrus, a much larger orchard from a neighboring state, began shipping fruit across state lines. In an attempt to increase its market share and take business away from Sol Citrus, Mega Citrus recently began competing directly with Sol Citrus at local farmers’ markets, selling non-organic oranges at a price per pound that is 30% lower than Sol Citrus’s current price. Although most of the patrons of those farmers' markets consider low prices to be a priority when selecting fruit, the owners of Sol Citrus have decided that they will not lower current orange prices in response to Mega Citrus's move.

Which of the following, if true, best explains Sol Citrus’s decision not to lower prices?

(A) Some consumers consider higher prices to a be a sign of higher quality.

(B) In each of the five years before Mega Citrus began shipping fruit across state lines, sales of Sol Citrus oranges at local farmers' markets exceeded combined sales of oranges from all other orchards selling fruit at the markets.

(C) If Sol Citrus were to lower its prices by just 20%, most of its regular farmers' market customers would continue buying Sol Citrus oranges instead of Mega Citrus oranges.

(D) When purchasing citrus fruit, most customers of the farmers' markets consider the fruit’s classification as "organic" to be more important than the cost of the fruit.

(E) Unlike Sol Citrus, Mega Citrus grows genetically modified fruits sprayed with pesticides that are illegal in the state in which Sol Citrus is located.

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GMATNinja · Accepted Answer

Here we have an apparent discrepancy: Mega Citrus and Sol Citrus are directly competing at farmers' markets where MOST customers consider low prices to be a priority when selecting fruit. If Mega Citrus is selling non-organic oranges at a price per pound that is 30% lower than Sol Citrus’s current price, you would think that Sol Citrus would have to lower its prices in order to stay competitive.

So which of the following, if true, best explains Sol Citrus’s decision not to lower prices?

Even if SOME consumers consider higher prices to be a sign of higher quality, that doesn't change the fact that MOST customers at these particular farmers' markets consider low prices to be a priority. Thus, we would still expect that Sol Citrus would have to lower its prices in order to stay competitive. (A) does not resolve the discrepancy and can be eliminated.

It doesn't matter how successful Sol Citrus was BEFORE Mega Citrus arrived at the markets. If Mega Citrus is now offering better prices, it might steal all or most of Sol Citrus's business. Choice (B) can be eliminated.

This statement suggests that Sol Citrus SHOULD lower its prices and does not explain why it would not. Eliminate (C).

The passage tells us that most of the customers consider cost to be a priority, but it does not tell us whether cost is the HIGHEST priority. Choice (D) tells us that most customers consider the fruit's classification as "organic" to be more important than the cost. Since Sol Citrus produces only organic citrus fruit, that might explain why customers are willing to pay more for fruit from Sol Citrus. Choice (D) helps to resolve the apparent discrepancy.

We cannot assume that the farmers' market customers know or care that Mega Citrus grows genetically modified fruits sprayed with those pesticides. Choice (E) is tempting but, on its own, does not explain the discrepancy.

Choice (D) is the best answer.

gmatexam439 · Answer

Sol Citrus, a small orchard that produces only organic citrus fruit, has faced new competition ever since Mega Citrus, a much larger orchard from a neighboring state, began shipping fruit across state lines. In an attempt to increase its market share and take business away from Sol Citrus, Mega Citrus recently began competing directly with Sol Citrus at local farmers’ markets, selling non-organic oranges at a price per pound that is 30% lower than Sol Citrus’s current price. Although most of the patrons of those farmers' markets consider low prices to be a priority when selecting fruit, the owners of Sol Citrus have decided that they will not lower current orange prices in response to Mega Citrus's move.

Which of the following, if true, best explains Sol Citrus’s decision not to lower prices?

(A) Some consumers consider higher prices to a be a sign of higher quality. - Okay this is a fact. There will always be some people who think otherwise. 
(B) In each of the five years before Mega Citrus began shipping fruit across state lines, sales of Sol Citrus oranges at local farmers' markets exceeded combined sales of oranges from all other orchards selling fruit at the markets. - We are not worried about what happened prior to the launch of Mega Citrus. 
(C) If Sol Citrus were to lower its prices by just 20%, most of its regular farmers' market customers would continue buying Sol Citrus oranges instead of Mega Citrus oranges. - We are told in the argument, that the prices won't be reduced. So this option is out of scope. 
(D) When purchasing citrus fruit, most customers of the farmers' markets consider the fruit’s classification as "organic" to be more important than the cost of the fruit. - Correct. If people think that if an organic fruit is better than a non-organic fruit, then it is a win win situation for Sol Citrus. 
(E) Unlike Sol Citrus, Mega Citrus grows genetically modified fruits sprayed with pesticides that are illegal in the state in which Sol Citrus is located. - Out of scope. We are not worried about the pesticides that might be used to grow the fruits. If the fruits being sold were harmful, then the law would have taken care of Mega Citrus before it could even sell it's fruits in the market.

Skywalker18 · Answer

Sol Citrus, a small orchard that produces only organic citrus fruit, has faced new competition ever since Mega Citrus, a much larger orchard from a neighboring state, began shipping fruit across state lines. In an attempt to increase its market share and take business away from Sol Citrus, Mega Citrus recently began competing directly with Sol Citrus at local farmers’ markets, selling non-organic oranges at a price per pound that is 30% lower than Sol Citrus’s current price. Although most of the patrons of those farmers' markets consider low prices to be a priority when selecting fruit, the owners of Sol Citrus have decided that they will not lower current orange prices in response to Mega Citrus's move.

Boil it down - Sol Citrus produces organic fruit, but Mega Citrus sells non-organic at 30% cheaper rate 
- Although , most patrons consider low prices a priority , Sol Citrus will not lower prices

Which of the following, if true, best explains Sol Citrus’s decision not to lower prices?

(A) Some consumers consider higher prices to a be a sign of higher quality. - Incorrect - only some people , but most might not consider higher prices to be sign of higher quality
(B) In each of the five years before Mega Citrus began shipping fruit across state lines, sales of Sol Citrus oranges at local farmers' markets exceeded combined sales of oranges from all other orchards selling fruit at the markets. - Irrelevant
(C) If Sol Citrus were to lower its prices by just 20%, most of its regular farmers' market customers would continue buying Sol Citrus oranges instead of Mega Citrus oranges. - Irrelevant - Sol Citrus is not reducing prices , so thinking about scenario of 20% decrease is not relevant
(D) When purchasing citrus fruit, most customers of the farmers' markets consider the fruit’s classification as "organic" to be more important than the cost of the fruit. - Correct - If this is true , the sales of Sol Citrus's fruits are unlikely to be affected.
(E) Unlike Sol Citrus, Mega Citrus grows genetically modified fruits sprayed with pesticides that are illegal in the state in which Sol Citrus is located. - Incorrect - it does not help as long as Mega Citrus is stopped from selling genetically modified fruits sprayed with pesticides

Answer D

kkrrsshh · Answer

IMO ans is D.
As D has 'Most customers' going for organic rather than the cost of the fruit, Sol Citrus need not lower prices.

TheNightKing · Answer

The key is the highlighted text. The MC decides to sell non-organic at lower prices. The best contradiction to this will be if people buy organic over the price factor. D exactly specifies that. Hence D.

Utkarsha20 · Answer

(A) Some consumers equate price with quality: While plausible, "some" is too weak to outweigh the "most" who prioritize low prices.
(B) Historical sales: Past performance doesn't explain how to handle a new aggressive competitor.
(C) A 20% price cut would work: This actually suggests that lowering prices would be a viable strategy.
(D) Organic status is more important than cost: This is the strongest explanation. If the customers value the "organic" label more than the savings, Sol Citrus doesn't need to match the price of Mega Citrus’s "non-organic" oranges. It targets a different value proposition.
(E) Illegal pesticides: While this makes Mega Citrus look bad, it doesn't explain Sol Citrus's pricing strategy unless it directly affects consumer behavior or legal ability to sell (which isn't stated).

Final Answer: (D)

Sol Citrus, a small orchard that produces only organic citrus fruit

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Sol Citrus, a small orchard that produces only organic citrus fruit

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

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Perfect 805 Score Debrief by Julia

My Rewards