SubratGmat2011 wrote:Country X imposes heavy tariffs on imported manufactured goods. Company Y has determined that it could
increase its profits in the long term by opening a factory in Country X to manufacture the goods that it currently
produces in its home country for sale in Country X. For Company Y's determination to be true, which of the
following assumptions must also be true?
When a CR passage describes a PLAN:
The PREMISE is the plan itself.
The CONCLUSION is the goal of the plan.
The ASSUMPTION is what must be true for the plan to work.
In the passage above:
The plan is to OPEN A FACTORY in Country X in order to avoid the tariff.
The goal is to INCREASE PROFITS.
Which answer choice MUST BE TRUE for the plan to work?
"¢ Company Y will be able to obtain all the necessary permits to open a factory in Country X.
No. The argument is not about whether the factory CAN be opened but about whether -- IF THE FACTORY IS OPENED -- Company Y will increase its profits. Eliminate A.
"¢ Company Y currently produces no goods outside its home country.
No. For the plan to work, it does not have to be true that company Y currently produces no goods outside its home country. Eliminate B.
"¢ A sustainable market for Company Y's goods currently exists in Country X.
Correct. Note that the passage tells us only that the goods produced by Company Y are FOR SALE in Country X. For Company Y to increase its profits, it is not enough that the products be FOR SALE; it must be true that there is a MARKET for the products and that people BUY them.
"¢ Company Y's home country does not impose tariffs on imported goods.
No. The argument is not about importing goods into Company Y's home country. Eliminate D.
"¢ Labor costs in Country X are lower than those in Company Y's home country.
No. It does not have to true that labor costs in Country X are LOWER; it must only be true that labor costs in Country X are not significantly HIGHER. Eliminate E.
The correct answer is
C.
Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at
[email protected].
Student Review #1
Student Review #2
Student Review #3
