Fish costs same uniformly in Eastville and surrounding suburbs.
Same wholesalers, same prices, same business expenses.
New tax breaks will lower cost of doing business WITHIN city.,

CONCLUSION : Therefore, in future, profit margins will be higher within city than in suburbs.

Which of the following would be useful information to know in order to evaluate above conclusion?


A. More or less, their profit margins can still be different just the same - not useful.

B. Nearer the city. So what? Is that within the city? And even if it is, do we know why they moved and how it is related to this issue of the profit margin? No.

C. If wholesale price of fish falls, rises or stays equal, it will still affect all these stores both inside and outside city, and will thus uniformly affect profit margin. This won't help us validate that profit margin within city is more or not.

D. If it has always cost the same, so what:? Does that explain the possibilities in the future?

E. Ahah. If the ones in the city set lower prices than the suburban ones, then the amount that they save with the tax breaks could be counterbalanced by reduced revenue and make profit margins within and outside city limits equal or even possibly more in the suburban ones. Useful info.

Pick E.

Pick E.

Seafood stores within the city may decide to keep the profit margins same and provide the benefits of lower the cost to the customer in order to achieve competitive edge in the business.

E for me too

(A) would play no role in evaluating the argument, because it is already said in the argument that Seafood stores (within the city and outside) buy the fishes from the wholesalers at the same cost. So whether the wholesalers are in the city or outside, it doesn't affect the argument at all.
(D) can be eliminated for the same reason.
(E) is the correct answer. If the Seafood stores with in the city decide to lower the set price, in order to counter the increased profit margin brought by the tax breaks (a step they may take to gain a superior selling advantage compared with the seafood stores at the suburbs) then, it may lower the net profit margin in future. So this weakens the argument. On the other hand, negating the answer choice on other hand, strengthens the conclusion, since increasing the set price would nothing but increase the profit margins in the future.

Thanks
Prashant

IMO E

By eliminating other answers.

can anyone explain why inspite of other options make a good choice??

I am bumping an old thread. I chose A as the answer and my reasoning was if taxes are reduced then they would be reduced for the wholesalers too. Therefore ppl stores in city can buy fishes at low price and sell them at high price, thereby making profits. I understand that E is a better option. But can someone eliminate A with a good reasoning.