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by gmatmachoman » Sun Nov 15, 2009 1:40 am
Food industry experts argue that an increase in the quality of food served by a restaurant will yield an increase in patrons and, thus, an increase in profits for the restaurant. But recent earnings reports indicate that those restaurants which went from serving average quality food to high quality food showed no increase in patrons and a loss in profits.

Which of the following statements, if true, offers the best partial explanation of this discrepancy?

(A) The average American eats out more and more every year.
(B) The increase in food quality gives a restaurant justification to increase their prices.
(C) Customers in restaurants are unaware of all but the most significant changes.
(D) Restaurants who serve higher quality food make more money.
(E) Customers appreciate higher quality food and tell their friends about it
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by hitmewithgmat » Sun Nov 15, 2009 1:36 pm
IMO is B.
Please provide OA.
A doesn't explain the loss in profits.
C Unawareness doesn't explain the loss in profits.
D and E are au contraire to the argument.
Disclaimer-I am not a GMAT savvy yet, but I am learning everyday with my fellow beatthegmat citizens.

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by pandeyvineet24 » Sun Nov 15, 2009 3:35 pm
IMO C,

Customers may not have noticed the higher quality of food, but they might have noticed the higher prices and hence stopped going to restaurant, leading to lower revenues and profits.

i think rest all others are out of scope.
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by heshamelaziry » Sun Nov 15, 2009 11:31 pm
IMO B
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by viju9162 » Mon Nov 16, 2009 3:03 am
I will go with B.
If the quality of food is increased, then more people should have visited the hotel. However, the hotel would have raised the costs, hence people would have stopped visiting the hotel
"Native of" is used for a individual while "Native to" is used for a large group
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by 2010gmat » Mon Nov 16, 2009 4:14 am
IMO C --> if customers are not aware of the changes then more and more of them might not be attracted to the resto ... and while serving high quality food resto will increase its expenses thus lowering the profits....
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by gmatmachoman » Mon Nov 16, 2009 7:35 am
IMO B...

Let us assume 50 patrons consume food with a given quality in the restaurant R . Now as per B,the quality has been increased.So for that quality to be served the restaurant has increased its prices(assuming that high quality ingredients are added that comes only by high prices).
But still the number of patrons has not increased.The same old 50 patrons are consuming their food with the improved quality athe cost of Restaurnt's earnings.So naturally Restaurant earnings report will show loss in profits.

Yeah C looks damn attractive.It says Customers are unaware of all but most important changes.My understanding is "Quality Change " is a critical factor for any customer and that shall not get unnoticed. Even if it gets noticed by one consumer, we need to assume that he needs to propage that "news " to other fellow customers thereby pulling the crowd to the restaurant.Since I felt this calls for "extended" assumptions I dumped Option C & voted B.

Plz share ur comments!!
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by mehravikas » Mon Nov 16, 2009 12:15 pm
I would go with C as it points out a gap that consumers may not be aware that the food prices have gone up because the quality of the food has increased.
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by brick2009 » Mon Nov 16, 2009 2:47 pm
PARADOX should address both sides of the argument...

C: Most significant change? what is categorised as most significant> ambience or quality? no clear ref. point to most significant

B: quality goes up.. thus prices went up...(probably) drop in clients...thus drop in profit
I think only B addressed both sides of the paradox..

quality and profits..hence B

what is the OA..
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by palvarez » Mon Nov 16, 2009 3:56 pm
B provides a justification TO increase. Are we sure that they have increased the price? If yes, it can explain; otherwise, it is a trap choice.
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by brick2009 » Mon Nov 16, 2009 4:05 pm
To resolve this paradox... that justification has to be True..



because.. argument says "those restaurants which went from serving average quality food to high quality food showed no increase in patrons and a loss in profits"

my understanding is; Quality went up is TRUE...hence PRICE also went UP.... thus profit went down...as customers dropped..
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by palvarez » Mon Nov 16, 2009 4:09 pm
Justification is true; but it doesn't mean that hypothetical action for which justification is given has occured.
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by xian1707 » Tue Nov 17, 2009 9:14 am
B is my answer.

At first I thought C was correct, because if customers are unaware of all, the numer of customers will not increase, which means restaurant shows no increase in profit.
But when I read the passage again, I realized the key words here were "a loss in profits". Restaurant would loss their profit because they loss customers. The best reason for lossing customer is the higher price of food. Thus, B is correct.
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by gmatmachoman » Tue Nov 17, 2009 10:22 am
:D

I never thought this Question will call for these many responses...Hahaha!!

I shall ping Testluv was the OE ...

Guys , I am sorry , I dont Have the OA. and i really forgot from where I got this piece of CR
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by Testluv » Tue Nov 17, 2009 6:44 pm
Hello all,

In paradox or "resolve the discrepancy" questions, we need to figure out the paradox. A "paradox" or "discrepancy" is just: something unexpected happened (surprise). In the passage, the paradox (or surprise) will usually be signalled by a contrast keyword ("but"; "yet"; "however" etc).

In paradox questions, it is important to have the answers to two questions clear in your head before approaching the answer choices:
1) What is the surprise (paradox)?
2) Why is it surprising (paradoxical)?

Here:

The paradox is that increase in food quality should attract more customers and increase profits BUT restaurants that go from providing average to high quality food have actually suffered a loss in profits. This is surprising because we would (presumably) expect the experts to be correct in saying that better food should lead to greater profits.

Only now are we ready to attack the choices. Normally, we are looking for a choice that will resolve the tension or surprise. Here, we are looking for a choice that will provide a partial resolution.

Choice C is correct. It tells us that consumers are only aware of the most significant changes. We are allowed to infer that a change from average to high quality food does not qualify as "a most significant change". So, even though they are serving better food, customers most likely do not notice this. Now, this would explain why profits did not go up. It falls short, however, of explaining why profits actually went down. It is, therefore, a partial explanation. (Of course, it is not too much of a stretch to infer that better food costs more money and that is why profits actually went down. At any rate, the choice definitely does provide a partial explanation).

Choice B does not partly explain why profits went down. If choice B had established that restaurants that improve the quality of the food they serve often DO (correspondingly) increase their prices, then it would definitely be providing an explanation, and would be a correct answer. However, it just tells us that restaurants that improve the food quality have a justification to increase price. So, justified though they may have been, we don't know if they actually DID raise their prices--so, this choice is incorrect unless you make an assumption! (Remember, the passage says that the way better food boosts profits is MORE customers, NOT higher prices).
Last edited by Testluv on Tue Nov 17, 2009 6:54 pm, edited 2 times in total.
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