Brand X designs and builds custom sneakers, one sneaker at a time. It

Question

Brand X designs and builds custom sneakers, one sneaker at a time. It recently announced plans to sell “The Gold Standard,” a sneaker that will cost five times more to manufacture than any other sneaker that has ever been created.

Which of the following, if true, most supports the prediction that The Gold Standard shoe line will be profitable?

(A) The Gold Standard will be favored by urban hipsters willing to pay exceptionally high prices for an exclusive product.

(B) Of the last four new sneakers that Brand X has released, three have sold at a rate that was higher than projected.

(C) A rival brand recently declared bankruptcy and ceased manufacturing shoes.

(D) The market for The Gold Standard will not be more limited than the market for other Brand X shoes.

(E) The Gold Standard is made using canvas that is more than five times the cost of the canvas used in most sneakers.

PikaB · Answer

Option B talks about a quantitative input which is related to profits with previous shoes. If they sold at higher prices so people are willing to pay and will purchase the Gold Standard shoes.

kungfury42 · Answer

I think the answer to this should be A.

(A) If The Gold Standard has a market where customers (Urban Hipsters) are willing to pay exorbitantly high prices for an exclusive product, there is no reason why this shoe line will not be profitable.

(B) Though it is a tempting option choice, it must be noted that the past trends are not a 100% fail-proof way of assuring the same projections on the new product line. Additionally, we know that 25% (1 of the 4) products failed as well so we cannot be sure of the profitability of The Gold Standard. Eliminate B.

(C) Competition ceasing to exist does not guarantee profitability of this company's new product line. Eliminate C.

(D) If the new product line shares the same or bigger market than other shoe lines, it still doesn't guarantee (unlike option A) that the company will be able to find enough customers who will be willing to pay 5x prices and make The Gold Standard profitable. Eliminate D.

(E) What factors make up the manufacturing costs to go up are of no relevance in determining the product's profitability since we do not know the market perception of the same. Eliminate E.

Isha19 · Answer

STIMULUS  - Both the sentences in the stimulus provide facts - the first sentence provides a background.

TYPE OF QUESTION  (as understood from the question statement) - Must be true/ Most supported

PRE-THINKING  - one way that hints towards the shoe line being profitable would be if the consumers/customers are the ones who like purchasing goods that are higher in price or are willing to pay more for exclusive products (custom).

OPTIONS  -  A : This option is very close to our pre-thinking. If the product will be favorable to a certain set of people then it definitely hints toward the shoe line being profitable. This is the correct answer.

B: It is incorrect to assume that the trend would continue and since past products did well, this will too. This product is also priced higher than other products and thus this statement alone does not help in supporting the statement that the show line would be profitable.

C: A rival brand closing down does not help support the statement as much because the number of rivals for Brand X is not mentioned. Maybe one of them is declaring bankruptcy but it is possible that this brand has many rivals.

D: This statement does not help in supporting the argument. It is possible that the market may be limited but since the price of the product is higher - selling enough even to a limited market may be enough to achieve profitability.

E: Irrelevant. This statement is only describing the shoe and does not give any reason to support our arguement.

ANSWER : A

agrasan · Answer

Brand X designs and builds custom sneakers, one sneaker at a time. It recently announced plans to sell “The Gold Standard,” a sneaker that will cost five times more to manufacture than any other sneaker that has ever been created.

Which of the following, if true, most supports the prediction that The Gold Standard shoe line will be profitable?

(A) The Gold Standard will be favored by urban hipsters willing to pay exceptionally high prices for an exclusive product.
 Strengthener , this option tells us that Brand X will face no issues in getting high revenues due to urban hipsters, thus, increasing our confidence that the brand will be profitable.

(B) Of the last four new sneakers that Brand X has released, three have sold at a rate that was higher than projected.
 No Impact , what happens in the past might not happen in future. Also, if those shoes were sold at a rate higher than projected then that doesn't mean that the brand was profitable.

(C) A rival brand recently declared bankruptcy and ceased manufacturing shoes.
 No Impact , it might be a big leap for us to assume that the Brand X will capture the market in this event.

(D) The market for The Gold Standard will not be more limited than the market for other Brand X shoes.
 Weakener , if there is no such advantage then it reduces our confidence that the brand will be profitable.

(E) The Gold Standard is made using canvas that is more than five times the cost of the canvas used in most sneakers.
 No Impact , we already know that the costs will be higher for Brand X so this option doesn't impact our confidence.

Brand X designs and builds custom sneakers, one sneaker at a time. It

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Brand X designs and builds custom sneakers, one sneaker at a time. It

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