Investing in fishing-boats could be very profitable at this time. A su

Question

Investing in fishing-boats could be very profitable at this time. A survey made by "Hook, Line and Sinker" magazine shows that 75 percent of the magazine's readers want to buy a new fishing-boat during the summer. However, fishing-boat manufacturers can only produce enough boats to satisfy 30% of total potential buyers.

Which of the following, if true, would undermine the soundness of the investment advice in the paragraph above?

A. Fishing-boats cost too much for the average fisherman.

B. Approximately a quarter of all fishermen do not use fishing-boats.

C. Approximately a quarter of all fishermen buy fishing-boats that can accommodate 2-3 fishermen.

D. Only half of all fishermen use a fishing-boat.

E. Only half of those who say they want to buy a fishing-boat actually end up buying one.

PyjamaScientist · Accepted Answer

(E)  ( kinda ).

I am not  totally   sold by it. But, the rest of the choices are  too   off the topic here. So, only (E)   cuts the mark (again  kinda ).

Say among 100 readers, 75  want  to buy a boat. Argument  says   these 75 people " want " to buy, not that they actually end up buying one. And the argument is kind of based on the Demand-vs-Supply dynamics that will be in favour of those investing in boats. But, if the "expected demand" is all but "air", then the idea of investing in boats will seem poor.

(E) says that only half end up buying boats eventually, so about 32-33 people out of 75 end up buying the boat. But only, 30 of them would get it. So, even in that case  Demand    still   is  greater than   Supply , so there still are chances of " some profit " here. But, if I put myself into the shoes of a potential investor, this new information sure would make me "think twice" about investing in boats. Hence, (E).

carlton17 · Answer

Can there be a contention suggesting that the number of potential buyers (75 percent of the magazine's readers) is not equal to 30% of total potential buyers for fishing boat manufacturers? Would that be an assumption?

SolankiDas · Answer

Option E- The manufactures will produce as per the demand. But in actual the buyers wont buy the boats as per the demands. Hence boats that wont be sold will cause loss to the manufacturer. Hence, undermines the argument.
Is this correct?

asmba · Answer

Hi  Bunuel  can you please share the OE?

ABHRAJIT · Answer

I’m no expert but I’ll try to explain why E is the right answer. The argument says that the boat manufacturers can meet 30% demand of the potential buyers. So if 75 out of 100 people are interested and the manufacturers can meet the demands of 0.3*75 so approx 22 people, then E says he will be able to sell 11 boats out of the 22 he has in his inventory and thus face losses. So option E weakens the argument.

Posted from my mobile device

rosalynd · Answer

The advice in the paragraph says investing in fishing-boats could make a lot of money because 75% of readers of a fishing magazine want to buy a new boat, but only 30% of the total potential buyers can be satisfied due to limited production.  Option E undermines this advice  by saying that only half of the readers who say they want to buy a fishing-boat actually buy one. This means that the actual demand for fishing-boats may not be as high as initially thought, which would make investing in fishing-boats less profitable than expected. The other options are less likely to undermine the advice because they don't affect the demand for fishing-boats among the magazine's readers.

AAkashdeepBansal · Answer

E is strenthening the argument as it is saying that the investment is good. Aren't we supposed to undermine this fact? And to weaken the argument, D seems to be the apt choice here.

dhairya18 · Answer

CONCLUSION: Investing in fishing-boats will be highly profitable at this time.

LINE OF REASONING:
Generalization: Magazine Readers' Intent -> Total Market Demand
Cause-Effect: High Consumer Intent + Supply Shortage (30% Capacity) -> High Profitability

CORE ASSUMPTION: The survey's stated intent matches actual future purchase behavior.

WEAKENING APPROACH: We need to show that stated desire does not turn into actual sales, proving that the market demand is lower than expected.

OPTION ANALYSIS:
(A) Incorrect. Does not undermine the data from the specific target audience (magazine readers) who explicitly stated they want to buy a boat.
(B) Incorrect. Knowing that some fishermen do not use boats does not invalidate the high buying intent shown by the surveyed group.
(C) Incorrect. The capacity or physical size of the boat being purchased is irrelevant to total industry sales volume.
(D) Incorrect. General boat-use statistics among all fishermen do not challenge the specific high demand metrics reported in the study.
(E) Correct. This choice attacks the causal relationship between stating an intent and completing a purchase. If only half of those who claim they want a boat actually buy one, the true demand is significantly lower than projected, undermining the premise that the investment will be highly profitable.

Investing in fishing-boats could be very profitable at this time. A su

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

Investing in fishing-boats could be very profitable at this time. A su

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