carpet maket

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carpet maket

by ankita1709 » Sun May 27, 2012 6:02 am
There is relatively little room for growth in the overall carpet market, which is tied to the size of the population. Most who purchase carpet do so only once or twice, first in their twenties or thirties, and then perhaps again in their fifties or sixties. Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?
A.Most of the major carpet producers market other floor coverings as well.
B.Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill.
C.Two of the three mergers in the industry's last ten years led to a decline in profits and revenues for the newly merged companies.
D.Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether.
E.The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles


Can someone please exp[lain why D should be the answer not C
Source: — Critical Reasoning |

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by ronnie1985 » Sun May 27, 2012 8:26 am
This is really a difficult choice to accept at first glance, but please note that the correct answer choice introduces a new cause for the mergers rather than that stated in the stimulus.

Stimulus says mergers will increase market share whereas the answer choice (D) says that the mergers will reduce the production cost and hence the companies are merging and giving up to their competitors, not to gain market share.

Hence the answer choice is weakening the argument.

(C) gives a factual statement about revenues and profits not of market share hence it is definitely wrong answer.

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by GMAT Kolaveri » Sun May 27, 2012 7:25 pm
ankita1709 wrote: Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?
A.Most of the major carpet producers market other floor coverings as well.
B.Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill.
C.Two of the three mergers in the industry's last ten years led to a decline in profits and revenues for the newly merged companies.
D.Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether.
E.The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles
Can someone please exp[lain why D should be the answer not C
Conclusion: X is the only to gain market share.
Question type: Weaken
Pre-thinking: Y is another method of gain market share. D speaks about an alternate way to gain market share.

why is C wrong: C talks about a specific case where merger failed. It doesnt address maker share. It is not relevant to the conclusion.
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