Reading Comprehension

Paragraph starts are indicated in bold statements..

Excess inventory, a massive problem for many businesses, has several causes, some of which are unavoidable. Overstocks may accumulate through production overruns or errors. Certain styles and colors prove unpopular. With some products-computers and software, toys, and books-last year's models are difficult to move even at huge discounts. Occasionally the competition introduces a better product. But in many cases the public's buying tastes simply change, leaving a manufacturer or distributor with thousands (or millions) of items that the fickle public no longer wants.
One common way to dispose of this merchandise is to sell it to a liquidator, who buys as cheaply as possible and then resells the merchandise through catalogs, discount stores, and other outlets. However, liquidators may pay less for the merchandise than it cost to make it. Another way to dispose of excess inventory is to dump it. The corporation takes a straight cost write-off on its taxes and hauls the merchandise to a landfill. Although it is hard to believe, there is a sort of convoluted logic to this approach. It is perfectly legal, requires little time or preparation on the company's part, and solves the problem quickly. The drawback is the remote possibility of getting caught by the news media. Dumping perfectly useful products can turn into a public relations nightmare. Children living in poverty are freezing and XYZ Company has just sent 500 new snowsuits to the local dump. Parents of young children are barely getting by and QRS Company dumps 1,000 cases of disposable diapers because they have slight imperfections.
The managers of these companies are not deliberately wasteful; they are simply unaware of all their alternatives. In 1976 the Internal Revenue Service provided a tangible incentive for businesses to contribute their products to charity. The new tax law allowed corporations to deduct the cost of the product donated plus half the difference between cost and fair market selling price, with the proviso that deductions cannot exceed twice cost. Thus, the federal government sanctions-indeed, encourages-an above-cost federal tax deduction for companies that donate inventory to charity.


The passage suggests that which of the following is a kind of product that a liquidator who sells to discount stores would be unlikely to wish to acquire?
(A) Furniture
(B) Computers
(C) Kitchen equipment
(D) Baby-care products
(E) Children's clothing

I donno how can we infer B

Information in the passage suggests that one reason manufacturers might take advantage of the tax provision mentioned in the last paragraph is that
(A) there are many kinds of products that cannot be legally dumped in a landfill
(B) liquidators often refuse to handle products with slight imperfections
(C) the law allows a deduction in excess of the cost of manufacturing the product
(D) media coverage of contributions of excess-inventory products to charity is widespread and favorable
(E) no tax deduction is available for products dumped or sold to a liquidator

OA : BC

Question 1:

We can eliminate option A and C as they are not mentioned in passage.

Baby care product and children clothing are dumped.Nowhere it's mentioned that these product are attractive to liquidators.

Now option B,Computers.In the passage it's mentioned that computers particularly last year models are difficult to move even at huge discounts.Since the demand for them would be low and liquidators would avoid to buy this.

Pick B

Q 2 : Pick C

From the para,


The new tax law allowed corporations to deduct the cost of the product donated plus half the difference between cost and fair market selling price, with the proviso that deductions cannot exceed twice cost.

4. The author cites the examples in lines 25-29 most probably in order to illustrate
(A) the fiscal irresponsibility of dumping as a policy for dealing with excess inventory
(B) the waste-management problems that dumping new products creates
(C) the advantages to the manufacturer of dumping as a policy
(D) alternatives to dumping explored by different companies
(E) how the news media could portray dumping to the detriment of the manufacturer's reputation


5. By asserting that manufacturers "are simply unaware" (line 31), the author suggests which of the following?
(A) Manufacturers might donate excess inventory to charity rather than dump it if they knew about the provision in the federal tax code.
(B) The federal government has failed to provide sufficient encouragement to manufacturers to make use of advantageous tax policies.
(C) Manufacturers who choose to dump excess inventory are not aware of the possible effects on their reputation of media coverage of such dumping.
(D) The manufacturers of products disposed of by dumping are unaware of the needs of those people who would find the products useful.
(E) The manufacturers who dump their excess inventory are not familiar with the employment of liquidators to dispose of overstock.


I will post the OA after few responses.

5) D

4) E
5) A

OA is in fact 4) E and 5) A

can you please explain too.

In 4) The last two lines of the second paragraph describe hypothetical situations resulting from the dumping. These mimic possible news headlines that could result if the public discovered the company was dumping.

In 5) In the third paragraph it says that companies are not AWARE of their alternatives. The next two sentences describe one of their alternatives: donating to charity to take advantage of a new tax incentive. If they were aware of this incentive, they may not dump excess inventory