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THE INTERNET BOOM

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by swetamurthy » Tue Oct 25, 2011 9:06 am
The internet boom and subsequent bust of the turn of the century led to an oversupply of manufacturing facilities for integrated circuits, resulting in fierce competition among manufacturers of computer components like CD-ROMs and video cards. Due to advances in the underlying technology used in video cards, the quality of the average unit has increased dramatically and prices have risen for the past consecutive five years. During the same period, prices of CD-ROMs have remained flat. Since profit margins for both components are approximately the same, we can conclude that video card manufacturers have enjoyed larger profits than CD-ROM manufacturers for the past five years.

Which of the following describes an unsupported assumption made in the passage above?

A) Video card manufacturers have managed to adapt to the oversupply of production better than CD-ROM manufacturers.

B) The demand for CD-ROM components has fallen significantly over the past five years.

C) Five years ago, the price of the average video card was equal to or greater than the price of the average CD-ROM.

D) The advanced technology present in video cards has allowed manufacturers to demand higher profit margins.

E) Video card manufacturers are managed more effectively than CD-ROM manufacturers, resulting in higher returns on assets.

SOURCE MGMAT CAT
sorry guys if its a repeat i searched and couldn't find this question posted elsewhere

please post your answers with explanations
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by krishnakumar.ks » Tue Oct 25, 2011 11:04 am
IMO B. Since this statement is not supported anywhere in the argument. Instead it contradicts the argument. The internet boom and subsequent bust of the turn of the century. OA?
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by vzzai » Tue Oct 25, 2011 7:48 pm
IMO C.
Thank you,
Vj
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by vinayaerostar » Thu Oct 27, 2011 10:36 am
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by samyukta » Thu Oct 27, 2011 1:02 pm
I guess Unsupported assumption is same as Assumption.

So IMO C fits the bill.When we say profits P2 >P1 then it has to be comapred with some base since the incremental percentage variation is same!
SO the base is the average price of both the products must vary accordingly.
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by swipesville » Thu Oct 27, 2011 4:09 pm
The internet boom and subsequent bust of the turn of the century led to an oversupply of manufacturing facilities for integrated circuits, resulting in fierce competition among manufacturers of computer components like CD-ROMs and video cards. Due to advances in the underlying technology used in video cards, the quality of the average unit has increased dramatically and prices have risen for the past consecutive five years. During the same period, prices of CD-ROMs have remained flat. Since profit margins for both components are approximately the same, we can conclude that video card manufacturers have enjoyed larger profits than CD-ROM manufacturers for the past five years.

Which of the following describes an unsupported assumption made in the passage above?

A) Video card manufacturers have managed to adapt to the oversupply of production better than CD-ROM manufacturers.

B) The demand for CD-ROM components has fallen significantly over the past five years.

C) Five years ago, the price of the average video card was equal to or greater than the price of the average CD-ROM.

D) The advanced technology present in video cards has allowed manufacturers to demand higher profit margins.

E) Video card manufacturers are managed more effectively than CD-ROM manufacturers, resulting in higher returns on assets.

I chose A here. I'm not in love with this choice but here's my reasoning.

A. the moderate language of MANAGED TO ADAPT and BETTER (could be 80% better, could be .1% better) very conservative there.

B. Nothing mention concretely about the demand of CD ROMS, a bit out of scope

C. very specific claim there which I don't believe is supported

D. strongly dislike this answer, there could be many reasons maybe a new game was released and kids want a video card to play it. Plus this wording implies the advanced technology is the ONLY reason.

E. another bad answer speculating on management techniques is not going to get it done here, there could be other factors, how about LUCK?

That's my analysis, hope it helps, gl.

~Brett
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by thestartupguy » Fri Oct 28, 2011 1:43 am
IMO: C

What's the OA?
Last edited by thestartupguy on Tue Nov 15, 2011 5:14 am, edited 1 time in total.
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by saketk » Fri Oct 28, 2011 7:14 am
swetamurthy wrote:The internet boom and subsequent bust of the turn of the century led to an oversupply of manufacturing facilities for integrated circuits, resulting in fierce competition among manufacturers of computer components like CD-ROMs and video cards. Due to advances in the underlying technology used in video cards, the quality of the average unit has increased dramatically and prices have risen for the past consecutive five years. During the same period, prices of CD-ROMs have remained flat. Since profit margins for both components are approximately the same, we can conclude that video card manufacturers have enjoyed larger profits than CD-ROM manufacturers for the past five years.

Which of the following describes an unsupported assumption made in the passage above?

A) Video card manufacturers have managed to adapt to the oversupply of production better than CD-ROM manufacturers.

B) The demand for CD-ROM components has fallen significantly over the past five years.

C) Five years ago, the price of the average video card was equal to or greater than the price of the average CD-ROM.

D) The advanced technology present in video cards has allowed manufacturers to demand higher profit margins.

E) Video card manufacturers are managed more effectively than CD-ROM manufacturers, resulting in higher returns on assets.

SOURCE MGMAT CAT
sorry guys if its a repeat i searched and couldn't find this question posted elsewhere

please post your answers with explanations
It took me a while to understand the question.. "unsupported assumption" -- wow!

IMO the correct answer should be OPTION C

I did not read the options immediately after reading the question and gave 10-20 secs to think what should be the option. Since we are talking about price, profit margin etc, the answer should also talk about these terms.

When I looked at option C I rechecked the stem. Clearly, the author is assuming that the price of both the products was same. Otherwise, the increase in the price of Video cards would not necessarily mean that the price of CD-ROM is less.

For example -- the starting price of Video card and CD-ROM was 10 and 100 resp. Then a increase of $10 every year for 5 years would bring the price of video card to $50 dollar, which is still less than the price of CD-ROM.
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by vinayaerostar » Fri Oct 28, 2011 7:24 am
"Since profit margins for both components are approximately the same, we can conclude that video card manufacturers have enjoyed larger profits than CD-ROM manufacturers for the past five years"

If the profit margin for both the items is same then in order to have more profit form video card then its demand should exceed the demand of CD-ROM. The answer B claims that the demand for CD-ROM has fallen significantly. So B is the best choice among the given five.
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by swetamurthy » Sat Oct 29, 2011 7:05 pm
OA - C

thanks saketk,swipeswille,samyukta for helpful explanations.
i was stuck between b and c, but now i understood.
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by razorback » Sat Nov 05, 2011 9:47 am
D, an assumption stating video card manufacturers demand higher profit margins, is incorrect assumption, since a premise of the article is that profit margins are approx. the same.

This is where I am confused. Is D not the right answer choice because, however wrong it may be, it isn't an unsupported assumption already in the argument?
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by HSPA » Mon Nov 14, 2011 8:29 am
+1 for razor.. D shall be the answer.
razorback wrote:D, an assumption stating video card manufacturers demand higher profit margins, is incorrect assumption, since a premise of the article is that profit margins are approx. the same.

This is where I am confused. Is D not the right answer choice because, however wrong it may be, it isn't an unsupported assumption already in the argument?
First take: 640 (50M, 27V) - RC needs 300% improvement
Second take: coming soon..
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by tuanquang269 » Mon Nov 14, 2011 5:26 pm
I am confuse between C and D after POE. Can anyone explain why D's wrong and C's correct.
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