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B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
47% (02:13) correct
53%
(02:32)
wrong
based on 2364
sessions
History
Date
Time
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Not Attempted Yet
Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufactures’ share of the industry’s revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairers) had their share increase from 20 percent to 30 percent.
Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?
(A) The possibility is left open that the statistics for manufactures’ share of revenues come from a different source than the other statistics.
(B) No matter what changes the automobile industry’s overall revenues undergo, the total of all shares of these revenues must be 100 percent.
(C) No explanation is given for why the revenue shares of different sectors of the industry changed.
(D) Manufactures and parts companies depend for their revenue on dealers’ success in selling cars.
(E) Revenues are an important factor but are not the only factor in determining profits.
Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?
(A) The possibility is left open that the statistics for manufactures’ share of revenues come from a different source than the other statistics.
(B) No matter what changes the automobile industry’s overall revenues undergo, the total of all shares of these revenues must be 100 percent.
(C) No explanation is given for why the revenue shares of different sectors of the industry changed.
(D) Manufactures and parts companies depend for their revenue on dealers’ success in selling cars.
(E) Revenues are an important factor but are not the only factor in determining profits.
23 Jun 2018, 09:02
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Adi93
Quote:
The conclusion of this argument is that rumored declines in automobile-industry revenues are exaggerated. Here's how the author gets there:
- Automobile manufacturers' share of industry revenues fell from 65% to 50%.
- Automobile part suppliers' share of industry revenues increased from 15% to 20%.
- Automobile service companies' share of industry revenues increased from 20% to 30%.
The first thing that stands out to me in the author's logic is that percentage shares don't tell us anything about the total amount of industry revenues. If I am splitting a dosa between three people, and I change the size of each person's share of that one dosa, I have not made the entire dosa any larger or smaller. Which is sad, because everyone deserves their own dosa, and I would really like to magically increase the size of any dosa that I see.
Quote:
Getting back to the argument, the author's evidence of how the total revenue is broken down tells us nothing about whether overall industry revenues have declined. As a result, they don't really support the author's conclusion. The correct answer choice will match this observation.
Quote:
The reason why this conclusion is poorly founded is not the source of evidence. The prompt states plainly that the % figures are true, and nothing in the argument depends on proving that the sources of these figures are trustworthy.
Most importantly, we're not asked to pick the choice that would create the maximum amount of arbitrary doubt. We are asked to analyze the logic of the author's argument and pick the choice that shows why the author's evidence does not support the author's intended conclusion. That's why we eliminate (A) and continue looking for a choice that addresses the logical problem we've identified (% share does not tell us anything about absolute level of decline in revenue).
Quote:
Choice (B) very directly lays out what's wrong with the author's logic. By affirming that all of these revenues always add up to 100%, we confirm that we really know nothing about how much revenue the automobile industry brought in over the past two years. We only know how the industry pie (or dosa) was allocated in proportional terms.
I hope this explanation satisfied your appetite for pie, dosa, and critical reasoning! Mmm... dosas.
25 Apr 2021, 03:45
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Fistail
OFFICIAL EXPLANATION
The conclusion of the argument states that the rumored declines in automobile- industry revenues are exaggerated (a numerical statement), but the premises provided in support of this argument only address the market share percentages of the three groups that have automobile-industry revenues (percentage statements). The percentage statements used by the author only indicates that the percentages have changed, not whether overall revenue has changed:
- 2 Years Ago Today
Manufacturers share 65% 50%
Suppliers share 15% 20%
Service company share 20% 30%
Total market size in % 100% 100%
Although the composition of the market has changed in terms of the market share of each group, this fact tells us nothing about industry revenues because market shares will always add up to 100% regardless of the actual dollars involved. Thus, automobile-industry revenues could have risen dramatically and the percentages above could still be accurate.
Answer choice (A): Although it is true that the possibility is left open that the statistics for the manufacturers share may come from a different source, this does not address the fundamental percentage-to-number error in the argument.
Answer choice (B): This is the correct answer. The answer reveals the error of the author: the changing market shares of different groups have no impact on the actual amount of revenues. In all instances, the market shares will add up to 100%, so a discussion of shifts within this 100% is meaningless as far as making a determination of whether revenues declined.
Answer choice (C): This is not a flaw of the argument. The author is allowed to simply note that the shares changed and use those facts to draw a conclusion. In the argument the conclusion is faulty, but not for the reason cited in this answer.
Answer choice (D): The interrelationship of the groups named in the stimulus is not an issue in determining whether the conclusion is in error.
Answer choice (E): The argument is about revenues, and information about profits will not reveal the error in the reasoning.
General Discussion
24 Aug 2007, 17:10
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Fistail
I would go with C.
The stem says that manufacturers' share of revenue is decreased while dealers' increased. it is negative correlation, which is very rarely seen in between those two sectors. Overal, no reasoning is give to support the rumored decline. Probably, new entrants in manufacturing have started sharing the sector revenue. Thus ones like Ford lost their revenue to Japanese ones while dealers started upping by diversifying their portfolios with new entrants' cars. But no evidence give to support that makes the statistics weak.
