Critical Reasoning

Complaints that milk bottlers take enormous markups on the bottled milk sold to consumers are most likely to arise when least warranted by the actual spread between the price that bottlers pay for raw milk and the price at which they sell bottled milk. The complaints occur when the bottled-milk price rises, yet these price increases most often merely reflect the rising price of the raw milk that bottlers buy from dairy farmers. When the raw-milk price is rising, the bottlers' markups are actually smallest proportionate to the retail price. When the raw-milk price is falling, however, the markups are greatest.

If all of the statements above are true, which one of the following must also be true on the basis of them?

(A) Consumers pay more for bottled milk when raw-milk prices are falling than when these prices are rising.
(B) Increases in dairy farmers' cost of producing milk are generally not passed on to consumers.
(C) Milk bottlers take substantially greater markups on bottled milk when its price is low for an extended period than when it is high for an extended period.
(D) Milk bottlers generally do not respond to a decrease in raw-milk prices by straightaway proportionately lowering the price of the bottled milk they sell.
(E) Consumers tend to complain more about the price they pay for bottled milk when dairy farmers are earning their smallest profits.

IMO : D

Raw || Botl || MU=ret-raw ||Ratio: MU/BM
50 100 50 50/100 = 0.5
Case 1: when price rises
70 120 50 50/120 = 0.41
Case 2: when price decreases
30 100 70 70/100 = 0.7


In D: it talks abt "respond straightaway by decreasing"... that is not the main point of the argument.

I think C is the only one we can conclude ...

PPl complain..because they think Bottlers are fleecing them when the price increases but the number clearly shows that the bottlers are not fleecing the consumers when they increase the price.. but they are actuallly ripping them off when the price decreases.. (the stimulus talks abt ratios)

So C is the only answer we can conclude based on the the numbers given..


Any othe take on this plz share..

D is obvious. The argument says that mark up are higher when highly unexpected and goes on to mention that the situation arises when farmer's prices falls, it means when farmer reduces the prices the dairy mills do not.

gmatmachoman wrote:Complaints that milk bottlers take enormous markups on the bottled milk sold to consumers are most likely to arise when least warranted by the actual spread between the price that bottlers pay for raw milk and the price at which they sell bottled milk. The complaints occur when the bottled-milk price rises, yet these price increases most often merely reflect the rising price of the raw milk that bottlers buy from dairy farmers. When the raw-milk price is rising, the bottlers' markups are actually smallest proportionate to the retail price. When the raw-milk price is falling, however, the markups are greatest.

If all of the statements above are true, which one of the following must also be true on the basis of them?

(A) Consumers pay more for bottled milk when raw-milk prices are falling than when these prices are rising.
(B) Increases in dairy farmers' cost of producing milk are generally not passed on to consumers.
(C) Milk bottlers take substantially greater markups on bottled milk when its price is low for an extended period than when it is high for an extended period.
(D) Milk bottlers generally do not respond to a decrease in raw-milk prices by straightaway proportionately lowering the price of the bottled milk they sell.
(E) Consumers tend to complain more about the price they pay for bottled milk when dairy farmers are earning their smallest profits.

IMO : D

Standard LSAT inference must be true question. But definitely a kind of question that could have been on the GMAT what with the numbers and all. The right answer must be true based on one or more statements in the passage. The four wrong answers could be false.

Because it is inference we can use the Kaplan denial test, and we stay away from extreme language.

Let's look at the choices under discussion, starting with chioce D.

Milk bottlers generally do not respond to a decrease in raw-milk prices by straightaway proportionately lowering the price of the bottled milk they sell.

Could this be false? That is, what would happen if milk bottlers DID respond to falling prices by straightaway proportionately lowering the price of the bottled milk they sell?

What would happen to the last sentences of the passage? In the last sentences we learn that the bottlers enjoy proportionately greater markups when prices are falling. Would they be able to enjoy these lavish markups if they straightaway normed their own prices? Of course not.

If we deny choice D--if the bottlers did respond to the falling milk prices by lowering their prices, then one or more statements in the passage would no longer be true. But in inference we must treat the passage necessarily true--therefore, choice D must be true. (Its denial must be false or else the last sentences of the passage must be false).

Choice C:

(C) Milk bottlers take substantially greater markups on bottled milk when its price is low for an extended period than when it is high for an extended period.

The emboldened are some of the words in the answer choice that make it wrong. We learn about markups being good for the bottlers when prices are falling. This is not the same as prices being low for an extended period of time. In fact, if prices did bottom out for an extended period of time, they are NOT falling!

But of course, once you figured out why D was right, you shouldn't care about C and why C is wrong (don't overuse POE, keep the focus on right answer). But even if you wanted to eliminate C, you didn't have to figure out the deduction in the above paragraph. One could have also been far less partial to choice C because of the "substantially," which is extreme here. In inference, choices that use extreme language are less likely to be correct; the more extreme a choice, the harder it is for the passage to be strong enough to have proven that choice necessarily true. On the other hand, if an answer choice doesn't use extreme language or does use tentative looseer langauge, it is easier for the passage to have proven it necessarily true.

Extreme is not always wrong, of course. But, in order for an extreme answer choice to be correct in inference, the passage would have to be equally as extreme on that point. And the passages usually don't traffic in extremities.

IMO D for sure

(C) Milk bottlers take substantially greater markups on bottled milk when its price is low for an extended period than when it is high for an extended period.

IMO C is wrong because bottlers have greater makrups when price of raw milk is low..
Not the price of bottled milk is low... Here ITS should refer to Raw milk
than bottled milk...

very good point nervesofsteel.

In fact, most wrong answer choices--even the most tempting ones--are wrong for more than one reason. So, we can say choice C is wrong for at least two reasons. One, it improperly conflates perpetually low prices with falling prices, as I wrote. And, two, it talks about the bottled milk rather than the raw milk as having low prices. Definitely, the reason you pointed out is a better one to eliminate choice C. However, if we were to replace the "bottled milk" with "raw milk" it would still be wrong for the reason I pointed out.

The reason most wrong answers are wrong for more than one reason is a byproduct of the test-taker's ensuring that, on an objective basis, there is only one correct answer.

I'd say D but I'm afraid more because of my intuition than any logic.