After an area has been hit by a natural disaster, there is often

Question

After an area has been hit by a natural disaster, there is often a great demand for plywood for repairing damaged homes. Retailers in the area often raise prices on new shipments of plywood to well above their pre-disaster prices, and some people denounce these retailers for taking advantage of a disaster to make more money on each sheet of plywood they sell. In fact, however, these retailers do not make more money on each sheet of plywood than before the disaster, because transporting the plywood into devastated areas is difficult and expensive, and therefore the plywood's cost to retailers is higher than it was before the disaster.

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

A. Residents of areas affected by natural disasters are often unable to pay the prices the retailers in those areas set for scarce necessities.
B. Retailers must pay the full amount of any increase in shipping costs.
C. No retailer makes enough money on each sheet of plywood sold to absorb for long an increase in shipping costs without raising prices.
D. Suppliers of plywood do not transport as much plywood to an area after it has been affected by a natural disaster as they did before it was so affected. 
E. The increase in the prices charged by retailers for plywood following a natural disaster does not exceed the increase in cost to those retailers.

Dooperman · Answer

Conclusion: these retailers do not make more money on each sheet of plywood than before the disaster.

E. The increase in the prices charged by retailers for plywood following a natural disaster does not exceed the increase in cost to those retailers. Correct.
If the increase in prices charged is higher, they make more money.

LamboWalker · Answer

Residents of areas that have encountered natural disasters denounce retailers for raising prices of plywood. The author claims that he price raise is justified as the retailers themselves incur higher costs for transporting plywood into such areas.

C - Incorrect. We are only concerned with the price charged by retailers following a natural disaster. The price they charge earlier is of no use to us and is thus not a required assumption.

E - Spot on. If the opposite of this were true, the conclusion fails.

unraveled · Answer

After an area has been hit by a natural disaster, there is often a great demand for plywood for repairing damaged homes. Retailers in the area often raise prices on new shipments of plywood to well above their pre-disaster prices, and some people denounce these retailers for taking advantage of a disaster to make more money on each sheet of plywood they sell. In fact, however, these retailers do not make more money on each sheet of plywood than before the disaster, because transporting the plywood into devastated areas is difficult and expensive, and therefore the plywood's cost to retailers is higher than it was before the disaster.

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

A. Residents of areas affected by natural disasters are often unable to pay the prices the retailers in those areas set for scarce necessities. - WRONG. Irrelevant.
B. Retailers must pay the full amount of any increase in shipping costs. - WRONG. Not necessary conditon. Irrelevant. 
C. No retailer makes enough money on each sheet of plywood sold to absorb for long an increase in shipping costs without raising prices. - WRONG. Big claim but extremes ruin it.
D. Suppliers of plywood do not transport as much plywood to an area after it has been affected by a natural disaster as they did before it was so affected. - WRONG. Not a necessity that it has to be true. 
E. The increase in the prices charged by retailers for plywood following a natural disaster does not exceed the increase in cost to those retailers. - CORRECT. Cost-price relation beautifully laid out.

Answer E.

RishiRamdani · Answer

1/ When an area is hit by a natural disaster, retailers often raise prices of new shipment of plywood.
2/ People denounce these retailers for taking advantage of a disaster to make more money on each sheet of plywood they sell.
3/ Argument : Retailers do not make more money because they have higher transporting cost due to the damaged area.

What does it imply ? => If they do not make more money than before the disaster, it means that the increase in plywood price is inferior or equal to the increase in transporting costs.

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

D.  The increase in the prices charged by retailers for plywood following a natural disaster does not exceed the increase in cost to those retailers.  => CORRECT

We can check the answer with the Negation test : The increase in the prices charged by retailers for plywood following a natural disaster  DOES EXCEED  the increase in cost to those retailers. => Destroy the argument

ninja_in_progress · Answer

The Answer choice B - 'Retailers must pay the full amount of any increase in shipping costs.'

Since Retailers need to cover the cost of shipping hence they are increasing the price of Plywood to cover for those costs. Had this been something which was being absorbed by the customers, retailer would not have increased the price and the argument would fall completely.

Can anyone review the above reasoning

gullyboy09 · Answer

Hi  MartyMurray , can you please help me with this question! When I looked at the conclusion - "therefore the plywood's cost to retailers is higher than it was before the disaster.", I thought it meant - "After the disaster, plywood became more expensive for retailers to buy", and in the passage the discussion was more on how much it cost them to sell, so I thought there is a jump here. But now when I look at the answer, I guess conclusion meant cost here is - ready to sell cost (which includes transportation to consumer cost too). Can you tell me if my understanding is correct here? If I go by the first route, then for example cost to retailer is 50 and he sold at 100. Now cost to retailer is 60 and he sells at 120, but it is still justified as here it is cost to retailers (buy cost) in which transportation is not included and given the circumstances, retailers are charging extra 10 for difficult transportation, and E is not necessary. But in cost if I take transportation also, then it makes sense.

AbhishekP220108 · Answer

Hi  gullyboy09  let me try to help

After an area has been hit by a natural disaster, there is often a great demand for plywood for repairing damaged homes. Retailers in the area often raise prices on new shipments of plywood to well above their pre-disaster prices, and some people denounce these retailers for taking advantage of a disaster to make more money on each sheet of plywood they sell. In fact, however, these retailers do not make more money on each sheet of plywood than before the disaster, because transporting the plywood into devastated areas is difficult and expensive, and therefore the plywood's cost to retailers is higher than it was before the disaster.

Conclusion- Retailers actually do not make more money on each sheet of plywood than they did before the disaster. Why? Because Transportation to devastated areas is difficult and expensive, making the cost of the plywood to the retailers higher than before.

The argument relies on the assumption that the extra amount retailers are charging customers is entirely offset by the extra amount the retailers are paying for shipping.

E. The increase in the prices charged by retailers for plywood following a natural disaster does not exceed the increase in cost to those retailers.- Option E perfectly captures this gap because the negated version says that increased price which is being charged exceeds the increase in cost to those retailers. If this is the case then yes the conclusion will not hold true

Hope this helps

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