Because of rising costs, United Shipping Company raised its

Question

Because of rising costs, United Shipping Company raised its rates by ten percent last year. Many of its customers balked at the increase, however, and turned to a rival company whose rates were lower. In response, United Shipping Company began offering a package of services for a single rate that, though high, is still lower than the combined rates of the individual services. Officers of the company claim that this move will recoup the company's lost profits.

Which of the following, if true, provides the best basis for the officers' claim? 
 
A - United Shipping will aggressively advertise the new package of services. 
B - United Shipping's rival does not offer some of the services included in the package. 
C - Marketing studies have shown that many of United Shipping's former customers would prefer a combined rate for their various shipping services.
D - United Shipping does not already offer all the services separately. 
E - No other shipping company offers the same package of services as United Shipping.

trivikram · Answer

The question asks about best basis for supporting the argument.

C. states that a study reveals that many would prefer a combo offer and hence the choice

A - United Shipping will aggressively advertise the new package of services.
 Its a strech away from the scope 
B - United Shipping's rival does not offer some of the services included in the package.
 Might be but we aint sure of it 
C - Marketing studies have shown that many of United Shipping's former customers would prefer a combined rate for their various shipping services.
 Close contender 
D - United Shipping does not already offer all the services separately.
 We are talking about combo offer 
E - No other shipping company offers the same package of services as United Shipping.
 We are worried about price too along with service

JDMBA · Answer

I didnt like the shift from a single rate to a combined rate because of the way combined was used in the passage. But I see the difference between them now.

A.Haung · Answer

C.
You are looking for a premise that would make officer's prediction true, which is to recoup lost profit, so a study showing that consumer wants that service would be best basis for the officer's claim.

trivikram · Answer

Not sure of the source but the official test may not be as ambiguous (Hope so)

saviop · Answer

A - United Shipping will aggressively advertise the new package of services.
Eliminate: If the price of services is lower elsewhere and customer have already moved to rival company, this strategy will not help.

B - United Shipping's rival does not offer some of the services included in the package.
Eliminate: The fact that customers have moved to rival company (see premise) suggest that they are getting the services they require from the rival company. So offering extra services alone (at higher prices) is not going to help United regain their customers back.

C - Marketing studies have shown that many of United Shipping's former customers would prefer a combined rate for their various shipping services.

Explanation: I have got to this answer choice by POE. I also took into consideration the fact that this is the only choice which mentions the price rate.


D - United Shipping does not already offer all the services separately.
Eliminate:
Does not mention the price hike factor.

E - No other shipping company offers the same package of services as United Shipping.

Eliminate: Explanation same as B.

JDMBA · Answer

Its MGMAT. Im done with reviewing their Verbal material. SC is ok but the rest is horrible.

I just took the LSAT and my RC and CR skills are superb. When I read the MGMAT's questions they are extremely ambiguous and require extreme leaps in logic. Then I go to the OG and fly through the problems.

beckee529 · Answer

agreed.. the OG RC and CR questions are rather easy... too easy for the most part which worries me.. i can only hope it is as clear and not ambigious on the actual test... but many people's verbal scores have been pretty low recently... =\

JDMBA · Answer

You got me worried now. The only way I can hit 750 is if my RC and CR are on point. There is no hope for me with SC. What are your thoughts regarding SC in MGMAT vs OG? Is MGMAT off like RC and CR?

trivikram · Answer

If your RC and CR are superb then your job is more than half done...Many people (OK at least I ) struggle in these 2 areas.... Any other section is easy to pick up 'cos they are more logical/rule based ;-)

beckee529 · Answer

i think the SC section is fine for MGMAT.. not much ambiguity although from what i heard, the sentence correction on the real thing throws more confusion... i would definitely do more GMATprep questions (even if there is more of an overlap with OG questions) to get a better feel of what you are up against for RC and CR. SC will always be tricky so get as much exposure to different types of questions.

JDMBA · Answer

If I could just nail the SC in the next week I will be golden. Im scoring 46+ in math and verbal all depends on how bad I do on SC. SC makes me want to pull my hair out.

beckee529 · Answer

having already taken the LSAT (i'm talking about you not me haha), the RC and CR should come easy. i would concentrate more on the SC. go back to fundamental grammar and see the type of traps that GMAT sets up. practice makes perfect, you won't regret the time you put in!

trivikram · Answer

Believe me you can do it. SC is all about staying alert for those signs that GMAT English only can provide :-)

Stay cool and ace the test....

JDMBA · Answer

Thanks for the encouragement. Im taking the test on the 29th and I have only been studying for two weeks. So i feel a little overwhelmed with all of the rules for SC and I am starting to stress a little that the SC is not coming easier. I still havent determined what I should concentrate more on SC or math. Sigh!!

gmat6nplus1 · Answer

I must agree with this guy, well RC is not that bad but CR is terrible. I stumbled upon this CR question on my latest MGMAT mock and picked the wrong answer. Since I wanted to figure out why the answer cited as correct was indeed correct I rushed to the explanation and discovered that all the answer choices except for the correct one are just a copy paste of the same appalling statement "This does not suggest that United Shipping will increase revenue or lower costs" well... how am I supposed to learn from this very CR? I guess I will just skip it

shasadou · Answer

OE:

United Shipping raised its rates because of rising costs. In response, many of its customers turned to a rival company with lower rates. In turn, United Shipping began to offer a new package of services at a single, higher rate, claiming that this move would recoup the lost profits. We are asked to find a choice that provides the best basis for the claim that profits will be recouped. So we need to find a choice that strongly suggests that United Shipping will actually increase its profits somehow. The company can do so by either increasing revenue or lowering costs.
(A) This does not suggest that United Shipping will increase revenue or lower costs.

(B) This does not suggest that United Shipping will increase revenue or lower costs.

(C) CORRECT. This does suggest that United Shipping will increase profits, since its new package of services will be popular with the same cost-conscious customers who had begun patronizing its competitor. Thus, these customers are likely to return to United Shipping rather than continue to pay for each of the rival's services individually.

(D) This does not suggest that United Shipping will increase revenue or lower costs.

(E) This does not suggest that United Shipping will increase revenue or lower costs.

souvik101990 · Answer

This is a VERY old question, but I added the OA regardless.

VerbalBot · Answer

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Because of rising costs, United Shipping Company raised its

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