Market forecaster: The price of pecans is high when pecans are compara

Question

Which of the following most logically completes the market forecaster's argument?

Market forecaster: The price of pecans is high when pecans are comparatively scarce but drops sharply when pecans are abundant. Thus, in high-yield years, growers often store part of their crop in refrigerated warehouses until after the next year's harvest, hoping for higher prices then. Because of bad weather, this year's pecan crop will be very small. Nevertheless, pecan prices this year will not be significantly higher than last year, since __________.

(A) the last time the pecan crop was as small as it was this year, the practice of holding back part of one year's crop had not yet become widely established

(B) last year's pecan harvest was the largest in the last 40 years

(C) pecan prices have remained relatively stable in recent years

(D) pecan yields for some farmers were as high this year as they had been last year

(E) the quality of this year's pecan crop is as high as the quality of any pecan crop in the previous five years

ID: 500252

AndrewN · Accepted Answer

Hello,  varotkorn , and thank you for tagging me. Notice, first, that you are not really looking to strengthen or weaken the argument, but the framework of the question asks you to provide  the reason  for why  pecan prices this year will not be significantly higher than last year . It is more of a  resolve the apparent discrepancy  type of question. We know we are looking for the reason because the blank follows the word  since . Your assertion that  last year's price would take a huge hit  is not necessarily correct. If the growers had held back part of their yield, rather than saturate the market, then the price of what they did put up for sale might have remained higher than it would have been. The passage supports this notion:

in high-yield years, growers often store part of their crop in refrigerated warehouses until after the next year's harvest .

Yes, it is true that growers  hope  for higher prices, but because of this very hope, it is clear that they cannot entirely control the market price of pecans. How about we take a look at the answer choices and see what we can eliminate?

We are not concerned with  the last time , but with  this time . Why would a lower crop yield from  this past year  not lead to higher pecan prices? This consideration does not provide any insight into the matter.

This would make sense. A surplus of pecans from the previous year would enable growers to sell pecans, plain and simple. You do not need to focus on real-life considerations, such as supply and demand. The fact of the matter is that this information fits what is presented in the passage.

This could be true, but it does not touch on the  reason  we are seeking. The supply of pecans from the crop of the last year is diminished, yet, once more,  pecan prices this year will not be significantly higher than last year . How do we resolve the discrepancy? Just because prices have been stable in the recent past does  not  explain why they would continue to remain stable.

The old  some  trap. We cannot qualify this vague count of farmers. How many were there? Two? Five? A million? The fact remains that, according to the passage,  this year's pecan crop will be very small . Whether  some  growers produced similar yields is irrelevant: the overall yield of pecans is significantly lower.

If the quality were  superior , then the growers might be able to charge more and meet similar sales figures from the past, but that could be the answer to a different question altogether. We need to explain why the lower yield would lead to a pecan price no higher than it had been a year ago. This answer requires a one-step-removed justification, i.e. that pecans of similar quality would command similar prices, but we need to explain why lower pecan yields will not drive up the price of pecans in a significant way.

In the end, only (B) resolves the paradox in a clear and direct manner, supportable by the information in the passage. I hope that helps. Feel free to ask me about any lingering concerns.

- Andrew

GMATGuruNY · Answer

The passage links scarcity to a high price and abundance to a low price.
B:  Last year's pecan harvest was the largest in the last 40 years 
Here, pecans were plentiful last year (because of the large harvest) and will be abundant this year (when all of last year's stored pecans are released for sale).
Common sense tells us the following:
Last year, the price was either low (because of the abundance of pecans) or perhaps not so low (if growers were able to store enough pecans to offset the large harvest).
This year, the price is likely to be low (when all of last year's stored pecans are released for sale, leading to an abundance of pecans in the marketplace).
Thus:
Option B supports the conclusion that  pecan prices this year will not be significantly higher than last year .

A word of advice:
Do not try to argue against the correct answer to an official problem.
Instead, strive to understand why the OA is correct -- so that you will be able to identify similar OAs, moving forward.

pikolo2510 · Answer

If last year, most of the farmers stored pecans in large refrigerators, then this year, despite a low pecan yield, prices of pecans will be lower than last year or similar to last year because farmers will sell last years yield and flood the market with pecans

Only option B supports the above.

DavidTutorexamPAL · Answer

the answer is B.

we can answer this using the  Logical  approach, since this question is about straightforward inference. 
The argument tells us that: when pecans are scarce, the price is high. however, this year the price is not high > this means pecans  must  not be scarce. Add to this the two additional bits of information: few pecans grew this year, but when there are many pecans they can be stored for the next year.  The conclusion is clear: last year there must have been many pecans, which were then stored, resulting in a fair amount this year. This is answer (B): last year's pecan harvest was the largest in the last 40 years

As always, we can also eliminate the other answers:

(A) the last time the pecan crop was as small as it was this year, the practice of holding back part of one year's crop had not yet become widely established -  irelevant, which cares about last time?

(C) pecan prices have remained relatively stable in recent years  doesn't mean they will this year, as we know, price is determined by scarcity

(D) pecan yields for some farmers were as high this year as they had been last year  who cares about other famers?

(E) the quality of this year's pecan crop is as high as the quality of any pecan crop in the previous five years  we care about quantity, not quality

TaN1213 · Answer

If you glance the argument again, we have:
"Thus, in high-yield years, growers often store part of their crop in refrigerated warehouses until after the next year's harvest,  hoping for higher prices then . "

If B were correct, then it would mean that the growers would now sell their stocked products at higher prices. On the contrary, the premise says that " pecan prices this year  will not be significantly higher than last year ". 
B logically contradicts the premise.

In my opinion,  the correct answer should be A.
 
 Premise : The price of pecans is high when pecans are  comparatively  scarce

A : the last time the pecan crop was as small as it was this year, the practice of holding back part of one year's crop had not yet become widely established
 Analysis : The yield of previous year is comparable to that of this year. It's not comparatively scarce. So, we can say that this year the price of pecans will  not  be significantly higher than last year.

DavidTutorexamPAL · Answer

Hey  TaN1213  - I disagree. 
Regarding (A) - it seems to me you may be assuming that "the last time the pecan crop was as small" was last year - but nowhere does it say that. It may have been 20 years ago, in which cast this information would be irrelevant. 
Regarding (B) - of (B) were correct, then there would be a large amount of pecans, meaning they would not be scarce, meaning the price would not be high. Which is what we are told. 
Why do you think if (B) were correct, the price would be high?

septwibowo · Answer

Hi  DavidTutorexamPAL , I am confused with this question as well as with your explanation.

My logic here is :
- This year, pecan crop will be very small, thus, the price will be going up.
- However, pecan price this year will not be higher than last year.
- You explained that :

- I disagree with "the price is not high". The passage just says the price  will not be higher .

Would you mind to explain a bit more? Highly appreciated!

DavidTutorexamPAL · Answer

You are correct that the price will not be high in a relative sense (that is, not much higher), but the logic remains the same: if pecans were scarce (relatively), the price would be a lot higher; the fact that this is not the case (they are not means higher), means the cause must not exist - they must not be scarce. (B) tells us why: we still have leftover pecans from last year.

kornn · Answer

Dear  IanStewart   AjiteshArun   VeritasKarishma   GMATGuruNY   MentorTutoring   MartyTargetTestPrep   VeritasPrepBrian ,

Why doesn't choice B. WEAKEN, rather than strengthen the argument?

Pecan prices this year will  not  be significantly higher than last year

(B)  last year's pecan harvest was the largest in the last 40 years

Choice B. says last year's price should be SIGNIFICANTLY LOW because of oversupply. (Surely, last year's price would take a huge huge hit)
Since this year's yield is very small, when comparing with last year's price, this year's price should be SIGNIFICANTLY HIGHER than that of last year.

To strengthen the conclusion, we need to show either of the 2 cases: 1. last year's price was high 2. this year's price is low. 
Since choice B. does the OPPOSITE of case #1., how can choice B. strengthen the argument?

How can we imagine that with the largest harvest in 40 years, last year's price was not significantly low?

Why is this thinking wrong?

GMATGuruNY · Answer

The assumption in red contradicts the passage.
According to the passage:
 In high-yield years, growers often store part of their crop in refrigerated warehouses. 
Consider the following case:
A normal yield per grower is 100 pounds.
Last year, the yield per grower was 200 pounds -- the largest in 40 years.
In accordance with the passage, each grower stored 100 pounds last year, with the result that the usual amount was released for sale: 100 pounds per grower.
Since the usual amount was released for sale, the price last year remained stable -- invalidating the assumption in red.

kornn · Answer

Dear  GMATGuruNY   AtlanticGMAT   VeritasKarishma   AjiteshArun   AtlanticGMAT   MentorTutoring   GMATNinja

To make choice B. work, we need to make a big assumption here, right?

According to the passage,  growers often store part of their crop in refrigerated warehouses until after the next year's harvest

ASSUMPTION 1  : We need to assume that the refrigerated warehouses have the EXCESS storage capacity enough to accommodate the yield LARGEST in 40 YEARS! That means in any of the previous year where yield was lower, refrigerated warehouses are left unused at all?

ASSUMPTION 2  : Moreover, with refrigerated warehouses,  no amount of high yield (even yield LARGEST in 40 YEARS) can possibly lower the price of the same year ? The price can still remain stable forever regardless of the high yield because we have unlimited storage capacity? It's like saying the surplus of crops last year couldn't bring the last year's price down at all.

In which scenario can the price possibly come down? 
No way because we could just store it all?

I'm very confused here. I though choice B. tries to say that last year's price would at least be very low and hence be lower than this year's price, weakening the argument that  prices this year will NOT be significantly higher than last year 
 Because choice B. can be viewed as WEAKENER, how can it be a strengthener?

AndrewN · Answer

All I can suggest,  varotkorn , is that you look to follow the linear logic of the passage, the information as it is presented, rather than projecting what you think the answer ought to be onto the question set. With the absolute language you are using above-- need ,  at all ,  no amount... can possibly ,  forever ,  unlimited --it is clear to me that you are trying to jam a square peg into a round hole. The  passage  is not dealing in absolutes for every year. Rather, it is concerned with the low crop yield of pecans from the previous year and how the storage system mentioned can help explain the relative stability of pecan prices this year, nothing more, nothing less.

- Andrew

KarishmaB · Answer

Prices high when pecans are scarce and low when they are abundant (so principle of demand-supply applies to it)
So in high yield years, part of the yield is stored for next year (so that price doesn't fall too much)
This year, pecan crop will be very small.
But pecan prices will not be much higher than last year.

Why?
For this to happen, there must be substantial availability of pecan this year. So last year, a lot of pecans must have been stored. So last year's crop must have been very good and to ensure that prices don't reduce much, a lot of it must have been stored. So prices would not have dropped much last year. And since we will have abundant supply this year, prices will not increase much this year.

Answer (B) supports this explanation.

Tanchat · Answer

I have 3 questions

1) in choice (A) the last time the pecan crop.... "Does the last time not mean = last year?"

2) in choice (A) if the last time (I assume last time = last year) was as small it was this year. With the same quantity, therefore pecan's price should be the same or about this year. Why A wrong ?

3) Although there is "Growers "often" store part of their crop..." in the passage, can we assume that choice (B) --> flowers stored their crop ?

AndrewN · Answer

Hello,  Tanchat . I think your confusion may stem from the very misinterpretation you outline in 1) above. In the passage,  the last time  has no definitive reference point. It could be the case that such a small pecan harvest occurred five years before, or twenty, fifty, or even more years in the distant past. We cannot assert or assume that  the last time  is synonymous with  last year . As for 2) above, keep in mind the frame of the question. You have to deliver an explanation that logically follows  since , one that sheds light on why a small pecan crop from this year will not necessarily lead to higher pecan prices. If we consider that  the last time  might have been a decade before, what kind of insight would the market forecaster  in the present  gain from knowledge of what had happened  then ? The answer is none. If you consider (B), though, in the context of the information provided by the passage, you can appreciate that a low pecan crop yield may not translate into higher pecan prices, since farmers could have stored part of their bumper crop from the previous year in refrigerated warehouses, allowing them to sell pecans all the same.

I hope that helps. You may want to check out several of the other explanations above if you need further clarification. Feel free to ask, too, if you have more questions.

- Andrew

Maldonado · Answer

I challenge experts for an ice cold beer

I think B has a  HUGE  flaw:

Last 39 years' supply: 1 trillion tons
Last year's supply 1 trillion and "0.0000000000000000000000.....1" grams
Last 40 years' demand: 1 trillion tons
Surplus from last year: "0.0000000000000000000000.....1" grams

Now please tell me how this completes the argument...
 
One may argue that "we do not need such a detailed analysis and we only need a little push"

Then I would say "well, my analysis and what option B states is 50% probability, there's no explicit or implicit info on whether I cannot infer my reasoning"

Warm regards

P.S. Don't forget to write your favourite beer

GMATNinja · Answer

Ooo not sure that I can decide on a favorite beer, but a Milk Stout from Left Hand Brewing sounds awesome right now (we're spoiled with craft breweries here in Colorado

). You're correct that (B) doesn't give us a perfectly airtight, flawless argument. But luckily, we don't NEED a perfect answer choice -- we just need to choose the answer choice that most logically completes the argument. In other words, is there an answer choice that MORE logically completes the argument than (B) does? Nope, there isn't -- check out @AndrewN's post for a rundown of the options. Even though (B) is somewhat lacking in detail (as you've outlined), it still does the BEST job at logically completing the passage. So, (B) is without a doubt the correct answer to this question. Is that answer satisfying enough to merit an ice cold beer? Probably not, but that's the reality of GMAT CR -- you have to answer the exact question on the page, and (B) does the trick. I hope that helps!

celan · Answer

Which of the following most logically completes the market forecaster's argument?

Market forecaster: The price of pecans is high when pecans are comparatively scarce but drops sharply when pecans are abundant. Thus, in high-yield years, growers often store part of their crop in refrigerated warehouses until after the next year's harvest, hoping for higher prices then. Because of bad weather, this year's pecan crop will be very small. Nevertheless, pecan prices this year will not be significantly higher than last year, since __________.

P : scarce = price high / abundant = price low
P : abundant years, growers often store until next year
C : This year produced pecan will be scarce but the price will not be high since pecans from last year will supplement this year's low production.

A. the last time the pecan crop was as small as it was this year, the practice of holding back part of one year's crop had not yet become widely established
-> If true, this year pecan crop prices must be high because holding back practice is not widely spread.

B. last year's pecan harvest was the largest in the last 40 years
-> Correct. This option implies that growers might have stored crops and such crops will supplement this year's low production

C. pecan prices have remained relatively stable in recent years
-> Information of pecan prices in recent years gives us no information about what will happen this year. The stable prices could have been because of stable production.

D. pecan yields for some farmers were as high this year as they had been last year
-> Some formers might have had high yields. However, the argument is stating that total production is very low.

E. the quality of this year's pecan crop is as high as the quality of any pecan crop in the previous five years
-> Irrelevant. The quality of pecan crop has nothing to do with the question.

SALAKSHYA · Answer

Hi AndrewN,
I think you are missing the thing that we are comparing this year price vs last year price . If last year harvest was low too, then this year prices will not be comparativly high

Market forecaster: The price of pecans is high when pecans are compara

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