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## Automobile-industry revenues

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raptor1985 Just gettin' started!
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Automobile-industry revenues Thu Mar 15, 2012 8:45 am
Elapsed Time: 00:00
• Lap #[LAPCOUNT] ([LAPTIME])
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.

OA : B
Source : Powerscore CR

Kindly explain the reason behind answer

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nitin_stmicro Just gettin' started!
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14 Mar 2012
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Thu Mar 15, 2012 11:12 am
The conclusion is that the automobile industry's revenue is declining.
By quoting pecentages for manufacturers and suppliers it cannot be predicted that the overall revenue is declining which is exactly what "B" states.

agarwalmanoj2000 Rising GMAT Star
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Thu Mar 15, 2012 8:59 pm
Good question.

Conclusion: Declines in automobile-industry revenues are exaggerated.

Overall automobile-industry comprises of manufactures, suppliers and services. Let us say total automobile-industry revenues for previous year and current year is 1000 USD i.e. no change in revenue.

Previous share will be manufactures (65% - 650 USD), suppliers(15% - 150 USD) and services (20% - 200 USD).
New share will be manufactures (50% - 500 USD), suppliers(20% - 200 USD) and services (30% - 300).

Although % share of manufactures, suppliers and services change but revenue may remain same (as per above example), increase or decrease between two years, so we cannot conclude anything without knowing the actual change in revenue amount.

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