Tata recently introduced a low-priced fully functional car - Nano ai

Question

Tata recently introduced a low-priced fully functional car - Nano – aimed at the middle-class population of India. However, since car ownership is considered a status symbol, the low pricing of the car is likely to deter most middle-class Indians from going for the Nano. Therefore, Nano is not going to account for a significant proportion of car sales in India.

Which of the following is an assumption on which the argument depends?

A. The upper middle class who can afford much more expensive cars are not likely to purchase a much cheaper alternative as a backup mode of transportation.
B. The Nano will reduce the proportion of profits Tata makes from the sale of low-priced category of cars in India.
C. The middle-class people buy expensive assets only when their everyday needs are met.
D. A person is not likely to buy a second car to serve as a mode of transportation just in case his/her first preference fails to achieve its goal.
E. While purchasing a particular model of a car, the price paid depends on the economic standing of the buyer.

rosalynd · Answer

The answer is A. The argument assumes that the upper middle class won't buy the Nano as a backup car just because it's cheaper. They probably want to keep their fancy car as their main ride to flaunt their status, ya know? So, even if Tata introduces a low-priced car, it won't be able to capture a significant market share among the middle-class population who view car ownership as a status symbol.

ABHRAJIT · Answer

Can somebody please explain why option D is wrong ? I am unable to eliminate option D.

Posted from my mobile device

rosalynd · Answer

If option D is an assumption the argument relies on, then the argument would become weaker if we negate option D. However, even if we assume that option D is false, and people are likely to buy a second car, it does not necessarily strengthen the argument. This is because people may still not buy the Nano as a second car, as car ownership could be considered a status symbol in India, regardless of whether it is their primary or secondary car.

Option A, on the other hand, states that car ownership IS considered a status symbol in India, regardless of whether it is their primary or secondary car. So, even the upper middle class, who can afford the second car, will not consider Nano as their second car. So, Nano cannot serve as a second car either.

swapnils123 · Answer

why is E not the answer?

The statement says "since car ownership is considered a status symbol, the low pricing of the car is likely to deter most middle-class Indians".
The option E has the correct assumption "While purchasing a particular model of a car, the price paid depends on the economic standing of the buyer." - I think this is correct because people think price paid depends on economic standing and as people look at car as a status symbol, buying cheaper car like Nano will mean the buyer has low economic standing and this will reduce the status symbol of the buyer.

I agree that A is also a good option but doesn't quite fit as it only accounts for upper middle-class and not all middle-class people.

rosalynd · Answer

The argument can be stated as follows.

Premises:
 Car ownership is considered a status symbol in India.
The Nano, which is aimed at the Indian middle-class, is too cheap to be considered a status symbol. 
Conclusion:
 Nano is not going to sell well in India.

Option E suggests that the economic standing of the buyer is a factor that determines the price paid while purchasing a particular model of a car.

However, this contradicts the premises in the argument, which suggest that the perception of car ownership as a status symbol is the main factor that determines the price paid for a car.

Therefore, it is not a good assumption in the context of the argument.

monkinaferrari · Answer

My doubt with option A is that - How do we know that upper middle class form a significant proportion of middle class ? what if the upper middle class forms just a tiny proportion of the total middle class population ?  Bunuel  could you please help to clarify this here ?

guddo · Answer

Tata recently introduced a low-priced fully functional car - Nano – aimed at the middle-class population of India. However, since car ownership is considered a status symbol, the low pricing of the car is likely to deter most middle-class Indians from going for the Nano. Therefore, Nano is not going to account for a significant proportion of car sales in India.
 
 Which of the following is an assumption on which the argument depends?

The argument’s point is that  because most middle-class Indians will avoid the Nano for status reasons, the Nano will not make up a significant share of car sales in India . So the argument must assume that some other group will not step in and buy enough Nanos to make sales significant.

(A) The upper middle class who can afford much more expensive cars are not likely to purchase a much cheaper alternative as a backup mode of transportation.

This is the best answer. The argument concludes that Nano will not account for a significant proportion of car sales. For that conclusion to hold, it must assume that people outside the target middle-class market, especially richer buyers, will not buy enough Nanos to make its sales substantial.

(B) The Nano will reduce the proportion of profits Tata makes from the sale of low-priced category of cars in India.

The argument is about sales proportion, not profits.

(C) The middle-class people buy expensive assets only when their everyday needs are met.

This is irrelevant. The argument is not about whether middle-class buyers can generally afford expensive assets.

(D) A person is not likely to buy a second car to serve as a mode of transportation just in case his/her first preference fails to achieve its goal.

This is too broad and not closely tied to the actual reasoning. The argument does not depend on a general claim about second cars.

(E) While purchasing a particular model of a car, the price paid depends on the economic standing of the buyer.

This is not required. The argument is based on status perception, not on the idea that price depends on the buyer’s economic standing.

Answer: (A)

guddo · Answer

I suppose your objection is fair, and that is exactly why  A is a bit loose but still the best fit .

The argument concludes about a  significant proportion of total car sales in India , not just sales to the middle class. So it is not enough to show that most middle-class Indians may avoid the Nano. We also need to assume that some other group, such as richer buyers, will not buy enough of it to make overall sales significant.

So A does not depend on upper middle class being a large part of the middle class. It works because it rules out an  alternate source of substantial sales . If that group were tiny, then A would matter less, but among the choices, it is still the one that best blocks the main gap in the argument.

egmat · Answer

Hi monkinaferrari,

Great question! Your thinking is logical, but you're adding a requirement that the assumption doesn't actually need to meet. Let me show you why.

First, let's understand the argument's structure: 
- The target market (middle class) won't buy Nano because of status concerns.
-  Therefore , Nano won't achieve significant sales.

The gap here is: What about buyers OUTSIDE the target market? Specifically, wealthier people who already own an expensive status car and might pick up a Nano as a cheap second car for practical use. For them, status isn't an issue — they already have their status car.

Now to your specific concern:  You're asking whether the upper middle class is large enough to matter. But here's the thing — you don't need this group to be a huge chunk of the middle class. You just need to consider whether they could generate significant car SALES. Even a relatively small percentage of wealthy households each buying a Nano as a backup vehicle could add up to significant sales volume.

Apply the  Negation Test  to confirm:  Negate A — 'The upper middle class IS likely to purchase a cheaper car as backup transportation.' If true, the Nano could rack up significant sales from this group alone, even though the core middle class avoids it. The conclusion collapses. That proves A is a necessary assumption.

Key Insight:  The assumption doesn't claim the upper middle class is large. It simply blocks an alternative pathway through which Nano could still achieve significant sales despite the middle class being deterred.

Key takeaway:  Assumptions don't need to guarantee the conclusion — they just need to be  necessary  for it. If removing the assumption destroys the argument, it's a valid assumption regardless of magnitude concerns.

Answer: A

agrasan · Answer

Hi  KarishmaB   MartyMurray   IanStewart

A. The upper middle class who can afford much more expensive cars are not likely to purchase a much cheaper alternative as a backup mode of transportation.

The argument talks about  "most middle class Indians"  which should include both  upper  as well as  lower  middle class. (A) talks about  "upper middle class"  which is kind of repeating the fact given in the argument. This is the reason I rejected (A) and chose (D).
I think that for (A) to work, the argument should have clearly highlighted the difference between  lower  and  upper  middle class.

Please let me know if I am wrong in my reasoning somewhere.

egmat · Answer

agrasan  - Which fact from the argument does Choice A repeat? Can you list that?

agrasan · Answer

Hi @eGMAT 
 The argument talks about  "most middle class Indians"  which should include both  upper  as well as  lower  middle class and (A) talks about  "upper middle class"  which should be covered in broader middle class definition.

vasu1104 · Answer

passage doesnt talk about particular middle class group. 
the conclusion is about car sales.
but if one group of upper class or group outside of middle class can buy nano car, the car can still account for some proportion of car sales.

egmat · Answer

Thank you! What does the word "most" mean? What visualization comes to mind when you see the term "most middle class Indians". Also, what does choice A say - visualize it and then tell me whether it provides new information or can you infer the same from the argument.

agrasan · Answer

Thanks, have understood my mistake.

KarishmaB · Answer

Note that " the low pricing of the car is likely to deter most middle-class Indians from going for the Nano" is an intermediate conclusion and not a fact. The only facts are that low priced car, Nano, has been introduced and car ownership is considered a status symbol. Rest are conclusions. So option (A) is not repeating facts given in the argument.

Tata recently introduced a low-priced fully functional car - Nano ai

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Tata recently introduced a low-priced fully functional car - Nano ai

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