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MGMAT CAT CR Question..

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MGMAT CAT CR Question..

by saurabh_maths » Mon Dec 27, 2010 6:50 am
Analyst: The pace of technological development brings a constant stream of new devices to the market, and many of them enjoy commercial success. But announcing new technology too soon after the introduction of a successful device can backfire. Once consumers hear about the new device, they may stop buying the one currently on sale. So, if a company wishes to announce the upcoming sale of a new device, it should wait until purchases of the old device have begun to decline.

Which of the following, if true, would best support the analyst's main assertion?
1. New technology often becomes less expensive after an initial surge in sales.

2. Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong.

3. Many consumers are unable to determine whether new technology is superior to current technology.

4.Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases.

5.Consumers tend to be loyal to technology companies whose products they enjoy using.

This is MGMAT CAT question. The OA is B.
I dont understand how come ans can be B.
Please explain.
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by rkanthilal » Mon Dec 27, 2010 10:38 am
P1: The pace of technological development brings a constant stream of new devices to the market, and many of them enjoy commercial success.
P2/Minor Conclusion: Announcing new technology too soon after the introduction of a successful device can backfire.
P3: Once consumers hear about the new device, they may stop buying the one currently on sale.
Main Conclusion: A company should wait until purchases of the old device have begun to decline before announcing the upcoming sale of a new device.

The analyst makes two claims in this passage. The first one is the minor conclusion that "announcing new technology too soon after the introduction of a successful device can backfire". The second assertion is the main conclusion that "a company should wait until purchases of the old device have begun to decline before announcing the upcoming sale of a new device."

Which of the following, if true, would best support the analyst's main assertion?

We need an answer that supports the main assertion: "A company should wait until purchases of the old device have begun to decline before announcing the upcoming sale of a new device." The basis for this is that once people hear about the new product they may stop buying the old product.

1. "New technology often becomes less expensive after an initial surge in sales." Incorrect. The conclusion that companies should wait before announcing the upcoming sale of a new device is based on the observation that if consumers hear about a new device they may stop buying the one currently on sale. Price is not a factor that is mentioned in the argument. It is only natural for the new product to be more expensive than the old one. According to this argument, the only factor affecting consumers' behavior is knowledge of the new product. Any other factors, such as price, do not apply.

2. "Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong." Correct. As mentioned in answer (1), the only factor that is relevant in this argument is knowledge of the new product. If the consumer knows about a new product he may not buy the current product and wait for the new one. For this reason the company should wait for sales to decline before announcing a new product.

This answer states that media outlets often report on the planned introduction of new devices. This implies that if companies announce new products the news will be picked up and spread by media outlets. This will result in consumers learning about the new product. According to the passage, this knowledge will affect buying decisions and this is something the tech companies want to avoid. This answer strengthens the conclusion because it provides a way for the announcements made by companies to reach the consumer.

3. "Many consumers are unable to determine whether new technology is superior to current technology." Incorrect. If people cannot determine which technology is superior they may be less likely to abandon the current technology. In this case this answer weakens the conclusion.

This answer can also be seen as "out of scope" since the passage does not mention the superiority of the new technology as a reason for the consumers switching. Even if we know that consumers can't determine which technology is superior we don't know how this will affect their buying decisions. They may still prefer the new product just because it is "new".

4. "Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases." Incorrect. This doesn't strengthen or weaken the conclusion. How many purchases a consumer makes is irrelevant.

5. "Consumers tend to be loyal to technology companies whose products they enjoy using." Incorrect. This answer does not affect the conclusion that companies should wait before announcing new technology. The conclusion is based on the observation that if consumers hear about a new device they may stop buying the one currently on sale. How loyal the consumer is to a particular company is not relevant to this argument.
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by saurabh_maths » Mon Dec 27, 2010 11:41 am
ohh yaa .. now I look at it from a diff angle.

Thanks a ton!
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