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seafood stores

by nikhilkatira » Sat Jun 26, 2010 10:25 am
Fish currently costs about the same at seafood stores throughout Eastville and its surrounding suburbs. Seafood stores buy fish from the same wholesalers and at the same prices, and other business expenses have also been about the same. But new tax breaks will substantially lower the cost of doing business within the city. Therefore, in the future, profit margins will be higher at seafood stores within the city than at suburban seafood stores.

For the purposes of evaluating the argument, it would be most useful to know whether.

(A)more fish wholesalers are located within the city than in the surrounding suburbs.

(B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city

(C) The wholesale price of fish is likely to fall in the future

(D)Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs.

(E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores.
Best,
Nikhil H. Katira
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by albatross86 » Sat Jun 26, 2010 11:01 am
Fish costs same uniformly in Eastville and surrounding suburbs.
Same wholesalers, same prices, same business expenses.
New tax breaks will lower cost of doing business WITHIN city.,

CONCLUSION : Therefore, in future, profit margins will be higher within city than in suburbs.

Which of the following would be useful information to know in order to evaluate above conclusion?


A. More or less, their profit margins can still be different just the same - not useful.

B. Nearer the city. So what? Is that within the city? And even if it is, do we know why they moved and how it is related to this issue of the profit margin? No.

C. If wholesale price of fish falls, rises or stays equal, it will still affect all these stores both inside and outside city, and will thus uniformly affect profit margin. This won't help us validate that profit margin within city is more or not.

D. If it has always cost the same, so what:? Does that explain the possibilities in the future?

E. Ahah. If the ones in the city set lower prices than the suburban ones, then the amount that they save with the tax breaks could be counterbalanced by reduced revenue and make profit margins within and outside city limits equal or even possibly more in the suburban ones. Useful info.

Pick E.
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by hardik.jadeja » Sat Jun 26, 2010 11:04 am
Pick E.

Seafood stores within the city may decide to keep the profit margins same and provide the benefits of lower the cost to the customer in order to achieve competitive edge in the business.
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by reply2spg » Sat Jul 24, 2010 8:21 pm
E for me too
Sudhanshu
(have lot of things to learn from all of you)
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by Prashant Ranjan » Tue Aug 21, 2012 11:11 pm
(A) would play no role in evaluating the argument, because it is already said in the argument that Seafood stores (within the city and outside) buy the fishes from the wholesalers at the same cost. So whether the wholesalers are in the city or outside, it doesn't affect the argument at all.
(D) can be eliminated for the same reason.
(E) is the correct answer. If the Seafood stores with in the city decide to lower the set price, in order to counter the increased profit margin brought by the tax breaks (a step they may take to gain a superior selling advantage compared with the seafood stores at the suburbs) then, it may lower the net profit margin in future. So this weakens the argument. On the other hand, negating the answer choice on other hand, strengthens the conclusion, since increasing the set price would nothing but increase the profit margins in the future.

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Prashant
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by hjafferi » Wed Aug 22, 2012 5:00 am
IMO E

By eliminating other answers.
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by mohan514 » Sat Aug 25, 2012 7:53 am
can anyone explain why inspite of other options make a good choice??
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by [email protected] » Wed Jul 24, 2013 9:50 am
I am bumping an old thread. I chose A as the answer and my reasoning was if taxes are reduced then they would be reduced for the wholesalers too. Therefore ppl stores in city can buy fishes at low price and sell them at high price, thereby making profits. I understand that E is a better option. But can someone eliminate A with a good reasoning.
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