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rising costs

by gmatnmein2010 » Sat Feb 20, 2010 3:28 am
Because of rising costs, United Shipping Company raised its rates by ten percent last year. Many of its customers balked at the increase, however, and turned to a rival company whose rates were lower. In response, United Shipping Company began offering a package of services for a single rate that, though high, is still lower than the combined rates of the individual services. Officers of the company claim that this move will recoup the company's lost profits.

Which of the following, if true, provides the best basis for the officers' claim?


1)United Shipping will aggressively advertise the new package of services.


2)United Shipping's rival does not offer some of the services included in the package.


3)Marketing studies have shown that many of United Shipping's former customers would prefer a combined rate for their various shipping services.


4)United Shipping does not already offer all the services separately.


5)No other shipping company offers the same package of services as United Shipping.
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by thephoenix » Sat Feb 20, 2010 3:39 am
gmatnmein2010 wrote:Because of rising costs, United Shipping Company raised its rates by ten percent last year. Many of its customers balked at the increase, however, and turned to a rival company whose rates were lower. In response, United Shipping Company began offering a package of services for a single rate that, though high, is still lower than the combined rates of the individual services. Officers of the company claim that this move will recoup the company's lost profits.

Which of the following, if true, provides the best basis for the officers' claim?


1)United Shipping will aggressively advertise the new package of services.
does not suggest that United Shipping will increase revenue or lower costs.

2)United Shipping's rival does not offer some of the services included in the package.
does not suggest that United Shipping will increase revenue or lower costs.

3)Marketing studies have shown that many of United Shipping's former customers would prefer a combined rate for their various shipping services.
hold it

4)United Shipping does not already offer all the services separately.
does not suggest that United Shipping will increase revenue or lower costs.

5)No other shipping company offers the same package of services as United Shipping.
does not suggest that United Shipping will increase revenue or lower costs.

hence by POe its C
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by komal » Sat Feb 20, 2010 1:24 pm
gmatnmein2010 wrote:Because of rising costs, United Shipping Company raised its rates by ten percent last year. Many of its customers balked at the increase, however, and turned to a rival company whose rates were lower. In response, United Shipping Company began offering a package of services for a single rate that, though high, is still lower than the combined rates of the individual services. Officers of the company claim that this move will recoup the company's lost profits.

Which of the following, if true, provides the best basis for the officers' claim?

1)United Shipping will aggressively advertise the new package of services.
Incorrect : Aggressively advertising the new package might not provide the best basis to recoup the company's lost profits.

2)United Shipping's rival does not offer some of the services included in the package.
Incorrect : How does this answer choice provide best basis for the author's claim? No chance !! ... Eliminated.

3)Marketing studies have shown that many of United Shipping's former customers would prefer a combined rate for their various shipping services.
Correct : United shipping's customers turned to its rival because it did not provide what the customers wanted. Now United Shipping is providing what the customers want (combined rate for their various shipping services). This would recoup the company's lost profits.

4)United Shipping does not already offer all the services separately.
Incorrect : Nothing in the stimulus says this.

5)No other shipping company offers the same package of services as United Shipping.
Incorrect : Irrelevant here.
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