CR2 help now..

manasi_sh · Posted: Sat Oct 27, 2007 9:17 pm Post subject: CR2 help now..

In the past year, there has been a large drop in the number of new cars sold, due to harsh economic conditions in the marketplace and high taxes. At the same time, the average price paid for a new car has risen dramatically.
Which of the following, if true, best explains the increase in the average price of a new car?
(A) The price of used cars has climbed steadily over the past ten years.
(B) There will be a tax reduction later in the year which is expected to aid moderate and low income families.
(C) The market for expensive car has been unaffected by the current economic conditions.
(D) Economic conditions are expected to get significantly worse before the end of the year.
(E) Low demand for trucks and vans has led to lower production in the factories.

ANS: C

jangojess · Posted: Sun Oct 28, 2007 1:13 am Post subject:

Avg - Avg price of cars
Total - Total price of cars
Num - Number of cars sold
Y1 - Past year
Y2 - Curr year

Avg Y2 > Avg Y1 ==> Total Y2/Num Y2 > Total Y1 /Num Y1
Now Num Y2 < Num Y1...So for the above inequality to be true Total Y2 > Total Y1. Now if the Total Y2 has to be gr8ter with number of cars dropped then the price of cars have to be greater than prev yr's or the same....Only C correctly mentions this...

Now if the above method doesnt strike u then use POE and eliminate the rest

A) nothing mentioned abt used cars - OUT OF SCOPE
B) tax reduction yet to come but the avg price has already risen, so cant be possible reason......ELIMINATE
D) a reason predicted to happen by end of yr...wht can this have an influence on price inc.....ELIMINATE
E) we're talking abt cars...not all vehicles, so why bring trucks and vans??? ......... OUT OF SCOPE

manasi_sh · Posted: Tue Oct 30, 2007 11:36 pm Post subject:

thanks a ton!!