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Brand X designs and builds custom sneakers, one sneaker at

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Brand X designs and builds custom sneakers, one sneaker at

by BTGmoderatorDC » Fri May 18, 2018 9:31 pm

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Brand X designs and builds custom sneakers, one sneaker at a time. It recently announced plans to sell "The Gold Standard," a sneaker that will cost five times more to manufacture than any other sneaker that has ever been created.

Which of the following, if it occurred, would cast the most serious doubt on the claim that The Gold Standard sneaker will be profitable?

(A) The endorsement of The Gold Standard by a popular celebrity

(B) The publication of a report indicating that all previous sneaker lines launched by Brand X have been profitable

(C) A significant increase in the cost of the canvas used to construct The Gold Standard

(D) The introduction of another new sneaker line by a rival manufacturer

(E) An announcement by Brand X that The Gold Standard will be marketed as an exclusive offering, available only in limited quantities
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by deloitte247 » Wed May 23, 2018 1:09 pm

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Option A: Wrong
An ''endorsement'' as it seems only seeks o market, popularize a particular product. One done especially by a celebrity would sell more and reach higher and wider consumer audience. This statement has only strengthened the brand's position to gain more from the product sales.

Option B: Wrong
Thus statement also expatiates that it is most likely the new product would become an instant success owning to the assumption that previous ''sneakers lines'' by the same brand have been a hit. Once again, the statement has lend credence to what the brand wants and not what the question asked.

Option C: Right
Here, it is stated unambiguously that the only reason there could be serious doubt over the plan is or would be rising cost of materials to be used in the production of the sneakers. The higher the price, the lower the consumption and likely have a proportionally lower profit margin. This has strengthened the purpose of the question so asked.

Option D: Wrong
This is speculative as it does not elaborate or seek to expatiate on how a rival brand would not be in the same position. Competition must be strengthened though buy if Brand X does not make profits from the intended production how does it serves as an incentive to a rival group.

Option E: Wrong
The statement means brand X has an arrangement that could further limit their profit margin. An exclusive sales offering would probably not guarantee higher profit margin which would be seen as anti-economics.
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