Magoosh CR #3

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Magoosh CR #3

by richachampion » Wed Sep 07, 2016 10:31 pm
The price of the SuperPixel high definition television, by Lux Electronics, has typically been out of the range of most consumers, a few of whom nonetheless save up for the television. This past July, the SuperPixel reduced its price by 40%, and sales during that month nearly tripled. TechWare, a popular electronics magazine, claims that the SuperPixel television should continue to see sales grow at this rate till the end of August.

Which of the following suggests that TechWare's forecast is misguided?

A. Most of the customers who had been saving up for the SuperPixel bought the television in July.
B. Sales of the MegaPixel high definition television, an even more expensive model than the SuperPixel, saw declining sales in the month of July.
C. Electronics sales tend to peak in August and December.
D. The SuperPixel tends to be an unreliable television and Lux Electronics makes a considerable profit from repairs.
E. The SuperPixel is the only model for which Lux Electronics plans a price reduction.
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by richachampion » Wed Sep 07, 2016 10:32 pm
OA: A
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by DavidG@VeritasPrep » Thu Sep 08, 2016 8:15 am
richachampion wrote:The price of the SuperPixel high definition television, by Lux Electronics, has typically been out of the range of most consumers, a few of whom nonetheless save up for the television. This past July, the SuperPixel reduced its price by 40%, and sales during that month nearly tripled. TechWare, a popular electronics magazine, claims that the SuperPixel television should continue to see sales grow at this rate till the end of August.

Which of the following suggests that TechWare's forecast is misguided?

A. Most of the customers who had been saving up for the SuperPixel bought the television in July.
B. Sales of the MegaPixel high definition television, an even more expensive model than the SuperPixel, saw declining sales in the month of July.
C. Electronics sales tend to peak in August and December.
D. The SuperPixel tends to be an unreliable television and Lux Electronics makes a considerable profit from repairs.
E. The SuperPixel is the only model for which Lux Electronics plans a price reduction.
Conclusion: Sales of SuperPixel TV's will continue to grow at same rate
Premises: TV was very expensive. Sales jumped after a price reduction

So the real question: will more and more customers be motivated to purchase this product in the future? Or were most of the interested customers simply waiting for a sale, thus depleting the ranks of potential future customers. This is what A addresses. Sales didn't jump because more and more customers were interested in the product. They jumped because an existing customer base was waiting for the right time to buy.
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