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Contrary to earlier predictions, demand for sugarcane has not increase
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Author:  Traj201090 [ 21 Aug 2022, 06:48 ]
Post subject:  Contrary to earlier predictions, demand for sugarcane has not increase

Hi Bunuel GMATNinja DmitryFarber

Need some clarity wrt option 'A'.

Beside relying on overall cost decline which is the most evident sign that help resolve the discrepancy, Can we not make a fair assumption that a fuel product, yielded from increased production of sugarcane, would have resulted in the higher profit ? This is the only reason I eliminated this option.

krish wrote:
Contrary to earlier predictions, demand for sugarcane has not increased in recent years. Yet, even though prices and production amounts have also been stable during the last three years, sugarcane growers last year increased their profits by more than ten percent over the previous year's level.

Any of the following statements, if true about last year, helps to explain the rise in profits EXCEPT:


(A) Many countries that are large consumers of sugarcane increased their production of sugarcane-based ethanol, yet their overall consumption of sugarcane decreased.

(B) Sugarcane growers have saved money on wages by switching from paying laborers an hourly wage to paying them by the amount harvested.

(C) The price of oil, the major energy source used by sugarcane growers in harvesting their crops, dropped by over twenty percent.

(D) Many small sugarcane growers joined together to form an association of sugarcane producers and began to buy supplies at low group rates.

(E) Rainfall in sugarcane-growing regions was higher than it had been during the previous year, allowing the growers to save money on expensive artificial irrigation.

Author:  GMATNinja [ 28 Aug 2022, 06:24 ]
Post subject:  Re: Contrary to earlier predictions, demand for sugarcane has not increase

Traj201090 wrote:
Hi Bunuel GMATNinja DmitryFarber

Need some clarity wrt option 'A'.

Beside relying on overall cost decline which is the most evident sign that help resolve the discrepancy, Can we not make a fair assumption that a fuel product, yielded from increased production of sugarcane, would have resulted in the higher profit ? This is the only reason I eliminated this option.

Take another look at (A):
Quote:
(A) Many countries that are large consumers of sugarcane increased their production of sugarcane-based ethanol, yet their overall consumption of sugarcane decreased.

(A) gives us some details about how certain countries are using sugarcane -- they're increasingly producing ethanol. But then we learn that these countries' "overall consumption of sugarcane decreased." In other words, they're shifting some sugarcane usage toward ethanol, but overall they're still using LESS sugarcane than they did previously.

This is why (A) doesn't explain the rise in profits. If these countries are using less sugarcane, then we'd expect lower sales of sugarcane, and thus lower profits.

(A) is the correct answer.

I hope that helps!

Author:  gmatpro15 [ 28 Aug 2022, 21:18 ]
Post subject:  Re: Contrary to earlier predictions, demand for sugarcane has not increase

Price and production of sugarcane has been stable. (This means the revenue has remained stable)
Yet, profit has increased.

So , only option with decrease in profit is option A

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