First-time computer buyers buying PXC home computers typically buy

Question

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.

(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.

(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.

(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.

(E) PXC's production costs for its computers were lower last year than they had been the previous year.

iwillcrackgmat · Accepted Answer

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
- but the number of PXC computers sold remained constant so its not the correct option.
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.
- not relevant question didnt speak about other products.
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. --- this doesnt speak about the raise in profits of PXC
- irrelevant
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
- since first time buyers are smaller the replacement buyers are more and the sales are constant the replacement sales resulted in more profits so correct answer.
(E) PXC's production costs for its computers were lower last year than they had been the previous year.
- profit margins are constant, so this can't be the answer.

AmoyV · Answer

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

Same # of computers. Price per computer and profit margin per computer same. Therefore cost per computer must also be the same. Therefore the only way profits from computer sales could have increased would be if the proportion of the powerful computers increased among the total computers sold.

A. PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first time computer buyers. This should decrease profits since we have no information in the argument which might indicate that in such a scenario, sale of powerful computers would increase so as the keep the total # ofcomputer sale constant 
B. The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year. We are only concerned about PXC's profits from computer sale and not computer-related products. 
C. Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.  We still don't know anything about what type of PXC computers these new buyers bought. 
D. The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.  The argument gives 2 classification 1. First time Buyers and 2. Powerful Machine Buyers. If the proportion of the 1st reduces then the proportion of the 2nd increases. Since we know the # of total computers remained unchanged, we can also conclude that the sale # of Powerful Machines increased. Since the profit margin of Powerful Machine is higher than the First Time Buyer machines, we can also conclude that the increase in profits were spearheaded by the increased sale of higher profit margin product like the Powerful Machine. 
E. PXC's production costs for its computers were lower last year than they had been the previous year. This goes against the argument. It has already been stated in the argument that the price and profit margins were the same. Hence the cost per machine would also be the same.

prasannar · Answer

D for me

The question clearly shows that of the bought computers the majority of the computers are replacements as only that way the profit margins would be more and thus D, D shows that the proportion of 1st time buyers is less

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a  smaller profit margin  per computer  than do  PXC computers bought by people  replacing their computers with more powerful models.   Last year PXC's profits from computer sales were substantially higher than the previous year , and the prices and profit margins for each computer model that PXC sells remained unchanged.

saikarthikreddy · Answer

D .Assume that the no of computers sold are the same for both the years .Since the propotion of the number of computers bought by first timers is less last year .It leads to a higher profit since more number of computers are bought by people who are replacing their old computers .

avohden · Answer

Answer (D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.

F = first time computer , Profit Margin = 10 | U = Upgraded computer , Profit Margin = 40

LY (last year) & PY (previous year) computers sold = 10

This year = 2013, Last Year = 2012, Previous Year = 2011
2012 - Total Profit (LY) = 2 * 10 + 8 * 40 = 340 ---> Proportion of F computer 20%
2011- Total Profit (PY) = 5 * 10 + 5 * 40 = 250 ---> Proportion of F computer 50%

Profit increased 340-250=90 or 9/25 or 36%.  Substantial increase in profits with no change in the # of computers sold.   because proportion of first time was smaller LY (20%) than the PY (50%)

pradeepss · Answer

Straight D

C is a shell game Answer choice. Look at the shift in the answer choice "competitors" I almost was certain it's was C after couple of second but when I read competitor that clicked aah this one is a trap.

PeterHAllen · Answer

Lets take a look at each choice:

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
 The argument states that the same number of PXC computers were sold. (A) Says that first-time computer buyers were more attracted to PXC computers and therefore wants to trick you into thinking that more people bought PXC computers and thus, PXC had a higher profit. However, the argument states that the number of computers sold was the same and thus, whether or not (A) is true is irrelevant.  
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year. The argument says nothing about other products. The argument is only about computer sales. 
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.  At first this seems like a contender because it makes you think that more people may have bought a more profitable computer because they were replacing their old computers and the argument states that "first-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models." However, this does not have to be true. Whether or not the buyers previously owned a PXC computer or computer from a competitor is not important.  
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
 This is the correct answer. It must be true that since the same number of computers were sold that more computers were sold to non-first time buyers. 
(E) PXC's production costs for its computers were lower last year than they had been the previous year. Profit margins do not change so this directly contradicts the argument.

mejia401 · Answer

If the statements above are true, which of the following is most strongly supported by them?

Conclusion:  Last year PXC's profits from computer sales were substantially higher than the previous year 
Reasoning:   There are two types of computers: low price and high price. Prices have not change, and same number of units were sold. Still, profit is higher. Therefore, the higher price computers sold more this year than last year. Correct answers must be inferred from the stimulus. Incorrect answers are as follows: could be true/likely to be true, exaggerated answers, new information, shell game, or reverse logic

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.  Wrong - This is not true, because stimilus says prices and profit margins for each computer remained unchanged.

(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.  Wrong - New information is provided

(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.  Wrong - New information is out of scope.

(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.  Must be true for profit margins to increase.

(E) PXC's production costs for its computers were lower last year than they had been the previous year.  Wrong - shell game and not supported by stimulus above. Prices and profits remained unchanged, so costs must have remained unchanged.

IMO D

Carcass · Answer

A tricky one. Not so much for the question itself but it is wordy a lot.

Under time pressure you need to slow down your speed and read very very carefully.

Ninety percent of the times the answer pop-up in your mind.

Only D gives us the right inference : we need the people that purchase the powerful machine are more than people that purchase first time machine.

I would say the question at stake is really almost the top you could see.

Regards.

JarvisR · Answer

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models.  
Last year PXC's profits from computer sales were substantially higher than the previous year, although about  the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

A. PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first time computer buyers.
>>Nope. Cant infer. # of units sold remained constant so how can this increase the profit.
B. The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.
>>Nothing mentioned abt the peripherals in arg so cant infer.
C. Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.
>> We don't abt this. Also, we would need ppl who r replacing their model not the first time buyer to get more money.
D. The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
>>Correct. Proportion of PXC computer bought by second time buyer is increased which means more money compared to wht we were earning from first time buyer.
E. PXC's production costs for its computers were lower last year than they had been the previous year. 
>>Nothing mentiond abt production cost.

pradeepss · Answer

Its easy to eliminate A, B and E.

Between C and D, C is tricky (and wrong) its basically is saying that first time buyer of PXC computer are more which goes against the conclusion. So D is clear and correct answer choice.

Answer: D

ziyavutdinov · Answer

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.  PXC's competitors raised the prices   – out of scope  
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.  PXC's profits from computer sales    out of scope 
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.  Competitors   out of scope  
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.  Correct answer. For example, if PXC had sold 100 computers in total during previous year for the price $100 for smaller computers (60 units) and $200 for powerful computers (40 units) the profit had been:
60*$100+40*$200=$6000+$8000=$14000 for previous year; However, if PXC sold 100 computers in total during last year for the price $100 for smaller computers (40 units) and $200 for powerful computers (60 units) the profit was: 40*$100+60*$200=$4000+$12000=$16000 
(E) PXC's production costs for its computers were lower last year than they had been the previous year.  production costs  - out of scope

Skywalker18 · Answer

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

Type :Inference
- First-time computer buyers buying PXC buy models that cost much less and have a smaller profit margin per computer
- Last year PXC's profits from computer sales were substantially higher , although about the same number of PXC computers were sold and margins were constant

Pre-thinking:
Total profit = (number of models of cheaper model * profit margin per unit of cheaper model)+ (number of models of expensive model * profit margin per unit of expensive model)
If the margins and total number of PCs is constant , the only way profit can increase is if the proportion of expensive models sold increases.

(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers. Out of scope
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.
May or may not be true
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. Out of scope
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year. Correct answer
(E) PXC's production costs for its computers were lower last year than they had been the previous year. May or may not be true

Answer D

AliciaSierra · Answer

This is "find conclusion" type question.
Scope of conclusion should be within argument.

Passage talks nothing about competitors.

Passage talks nothing about computer related stuff.

Passage talks nothing about "proportion who are replacing a computer made by competitor"

Passage talks about first time computer buyers etc. Scope of this conclusion is within passage.

Passage talks nothing about production costs.

So D is Answer

newyork2012 · Answer

reading kills me it took me 2:11 to read the whole thing

((((((((

hientranzx · Answer

First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.

First-time buyers: cost much less, smaller profit margin per computer 
Not First-time buyers: cost more, high profit margin per computer

Profit from computer sales increased. Price, quantity and profit margin constant.

If the statements above are true, which of the following is most strongly supported by them?

(A) PXC's  competitors  raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
Irrelevant to profit of PXC

(B) The number of people buying PXC computers who also bought  PXC computer-related products , such as printers, was larger last year than the previous year.
Irrelevant to profit of computer sales

(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a  competitor  of PXC was greater last year than the previous year.
Irrelevant to profit of computer sales of PXC (Since the quantity remained unchanged)

(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
 This is the correct answer.
High portion of buyers are not the first-time buyer --> Margin profit is higher --> Higher profit

(E) PXC's  production costs  for its computers were lower last year than they had been the previous year.
Irrelevant information to the passage

krndatta · Answer

EducationAisle 
Sir, 
I eliminated option E on the basis that we do not have any information about the individual production costs of the PC's in the passage above. 
Furthermore, this contradicts the info in the passage. The passage mentions that prices and profit margins remained unchanged. So how can production costs become lower?

Am I correct in my reasoning above.

Please evaluate.

EducationAisle · Answer

Please note that this is a "conclusion" question. As you mentioned, E cannot be true because you cannot conclude E on the basis of the argument, since argument clearly mentions that prices and profit margins for each computer remained unchanged. This clearly means that the "costs" also remained unchanged.

krndatta · Answer

EducationAisle  
Sir, 
In option C, 
the meaning conveyed in option C is that

People going from a competitor of PXC to PXC
------------------------------------------------------
 Compt. of PXC->PXC + PXC->PXC

This entire ratio above was greater last year than the previous year. 
Why can't this option statement be the answer because the stimulus mentions that the profit margins of computer being replaced by people is higher than the profit margins of computers bought for the first time. Furthermore, the passage above mentions that profit margins were higher last year than previous year. So hence, can't this be concluded?

Please share your two cents.

First-time computer buyers buying PXC home computers typically buy

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First-time computer buyers buying PXC home computers typically buy

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