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Red Label

Expert replies
by aj5105 » Thu Sep 11, 2008 10:39 am
To entice customers away from competitors, Red Label supermarkets have begun offering discounts on home appliances to customers who spend $50 or more on any shopping trip to Red Label. Red Label executives claim that the discount program has been a huge success, since cash register receipts of $50 or more are up thirty percent since the beginning of the program.
Which of the following, if true, most seriously weakens the claim of the Red Label executives?
(A) Most people who switched to Red Label after the program began spend more than $50 each time they shop at Red Label.
(B) Most people whose average grocery bill is less than $50 would not be persuaded to spend more by any discount program.
(C) Most people who received discounts on home appliances through Red Label’s program will shop at Red Label after the program ends.
(D) Since the beginning of the discount program, most of the people who spend $50 or more at Red Label are people who have never before shopped there and whose average grocery bill has always been higher than $50.
(E) Almost all of the people who have begun spending $50 or more at Red Label since the discount program began are longtime customers who have increased the average amount of their shopping bills by making fewer trips
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Source: — Critical Reasoning |

by banker1 » Thu Sep 11, 2008 11:25 am
IMO: D

We want to weaken the claim:
Red Label executives claim that the discount program has been a huge success, since cash register receipts of $50 or more are up thirty percent since the beginning of the program.

(A) is inline with the claim but is not the best answer

(B) is irrelevant

(C) is wrong. If most people will shop after the progam ends they will not have an impact on the success of the program

(D) is the best answer IMO. New customers who spend on average $50+ on groceries will increase the % of register receipts, there is no mention of the people coming to the store because of the discount program and no mention of the new customers taking advantage of any discounts on appliances.

Mathmatically, 100 shoppers spending $50+ before the program started and 130 shoppers spending $50+ after the program started represents a 30% increase in receipts $50+.

(E) is also inline with the claim but not the best answer.

What is the OA?
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by sethids » Thu Sep 11, 2008 1:07 pm
D would strengthen the claim. It says that the increase was because of those people who never shopped at Red Label but always had bills greater than $50.
Because they never shopped at Red Label earlier, they must have been shopping somewhere else. This somewhere else are the competitor stores. This means that Red Label has been able to attract the customers from competitor's share of the market (which was the intent of the program).

E should be the answer. It weakens the claim because it mentions that the people who shopped at Red Label have been long time customers and have increased their spending to reduce the number of their trips.
This clearly indicates that the customer base hasn't increased as the program desired.
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by banker1 » Thu Sep 11, 2008 1:22 pm
sethids wrote:D would strengthen the claim. It says that the increase was because of those people who never shopped at Red Label but always had bills greater than $50.
Because they never shopped at Red Label earlier, they must have been shopping somewhere else. This somewhere else are the competitor stores. This means that Red Label has been able to attract the customers from competitor's share of the market (which was the intent of the program).

E should be the answer. It weakens the claim because it mentions that the people who shopped at Red Label have been long time customers and have increased their spending to reduce the number of their trips.
This clearly indicates that the customer base hasn't increased as the program desired.
I see where you are coming from but (D) doesn't mention anything about the new customers taking advantage of the discounts on appliances. My interpretion was the program was supposed to drive customers to Red Label through the use of the discount, if new customers are not using the discount then the program failed.
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by aj5105 » Fri Sep 12, 2008 4:25 am
OA - E.
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by niraj_a » Fri Sep 12, 2008 9:51 am
boo yah, i chose E!!!
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by john83.amar » Wed May 11, 2016 4:59 am
I THINK IT'S E
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