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CR - Princeton, not satisfied with OA, please discuss

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reply2spg: Legendary Member; Posts: 1261; Joined: Sun Sep 14, 2008 3:46 am; Thanked: 27 times; GMAT Score:570

by reply2spg » Sat Mar 06, 2010 1:18 pm

A small country, Country S, has instituted a hefty tax on imported electronics in an attempt to protect the largest company and employer in the country. As a result of this import tax, the national electronics company is now able to compete in the electronics market.

Which of the following can be inferred from the information above?

Only small quantities of electronics from companies outside of Country S will now be sold in Country S.

To take further advantage of the import tax, the national electronics company will expand its product line.

Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.

Electronics are cheaper to produce outside Country S than inside Country S.

The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.

OA D. However, how is it inferred? Which sentence talks about OA?

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Source: Beat The GMAT — Critical Reasoning | Sat Mar 06, 2010 1:18 pm

Phirozz: Master | Next Rank: 500 Posts; Posts: 232; Joined: Sun Feb 28, 2010 10:47 pm; Thanked: 10 times

by Phirozz » Sat Mar 06, 2010 7:27 pm

reply2spg wrote:A small country, Country S, has instituted a hefty tax on imported electronics in an attempt to protect the largest company and employer in the country. As a result of this import tax, the national electronics company is now able to compete in the electronics market.

Which of the following can be inferred from the information above?

Only small quantities of electronics from companies outside of Country S will now be sold in Country S.

To take further advantage of the import tax, the national electronics company will expand its product line.

Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.

Electronics are cheaper to produce outside Country S than inside Country S.

The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.

OA D. However, how is it inferred? Which sentence talks about OA?

A. As per the psg, local companies will be able to compete in the market, but we cannot say that less imported goods ll be sold. A is out
B. It is irrelevant, nothing can be infered about expansion plan
C. Out of scope, talking about transportation cost
D. Its the answer because In country S, cost of production is high so sales price also high. Since the import price is low compared to the price in country S, it can be inferred that its cheaper to produce in other countries.
E. Its again irrelevant, talking about country T and U which is not mentioned in psg.

D can be rejected on the ground that even if cost of production is high in other countries, their govt provide export subsidy so the import price in country S becomes lower. Since other four options are clearly out of scope, D can be inferred.

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rockeyb: Legendary Member; Posts: 537; Joined: Sun Jul 19, 2009 7:15 amFollowed by: 1 member; Location: Nagpur , India; Thanked: 41 times

by rockeyb » Sun Mar 07, 2010 4:10 am

Lets analyze the stimulus first .

Country S is producing electronics good and also importing electronics . However country S institute hefty tax on import and as a result national electronic company is able to compete in the market.

Now if we look closely the sentence says COMPETE and compete dose not mean national electronics company is now selling its products and holds an equal market share .

The other thing to note is that even after the hefty tax the imported goods still sell and national electronics is only competing and not exceeding its market share.

So there must be some reason why still the companies in country S only can compete with outsiders and not defeat them , lets look at the answers :

(A)Only small quantities of electronics from companies outside of Country S will now be sold in Country S.

[May be true may be not nothing in the premise says this will be true , more importantly dose not give reason to our question. eliminate]

(B)To take further advantage of the import tax, the national electronics company will expand its product line.
[Again extra information given and nothing in the premise states this to be true. Eliminate]

(C)Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.
[The tax part is ok , but there is no mention of transport cost and again extra info . Eliminate]

Electronics are cheaper to produce outside Country S than inside Country S.
[Now if we put this reason into our question makes sense and more importantly agrees with the information provided in the premise . Correct ]

The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.
[extra information , nothing said about exporting products. Eliminate]

So even if you can not infer the correct answer , just by eliminating the options that provide added information you can get the to the correct answer.

"Know thyself" and "Nothing in excess"

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thephoenix: Legendary Member; Posts: 1560; Joined: Tue Nov 17, 2009 2:38 amFollowed by: 5 members; Thanked: 137 times

by thephoenix » Sun Mar 07, 2010 5:06 am

reply2spg wrote: sometimes eliminations helps

Only small quantities of electronics from companies outside of Country S will now be sold in Country S.
quantity is not at all covered by stimulus...eliminate

To take further advantage of the import tax, the national electronics company will expand its product line.
not at all discussed it might be true but its way out of stimulus

Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.
transportation costs is not discussed.........eliminate

Electronics are cheaper to produce outside Country S than inside Country S.

The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.
contryT and U out of scope.....
only D remains

OA D. However, how is it inferred? Which sentence talks about OA?

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joseph32: Master | Next Rank: 500 Posts; Posts: 303; Joined: Sat Aug 22, 2015 10:23 am

by joseph32 » Sun May 15, 2016 11:52 pm

I will Go with option D in this case.

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