Manufacturers sometimes discount the price of a product to

[BTGmoderatorDC]

Manufacturers sometimes discount the price of a product to retailers for a promotion period when the product is advertised to consumers. Such promotions often result in a dramatic increase in amount of product sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?


(A) The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.

(B) For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.

(C) For products that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.

(D) During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.

(E) If a manufacturer falls to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.



OA D

Source: Official Guide

[deloitte247]

Premise: Manufacturers sometimes discount the price of a product to retailers for a promotion period when the product is advertised to consumers.

Conclusion: Manufacturers could often make more profits by not holding the promotions.

Option A - Incorrect:
This option is incorrect because the amount of discount offered by manufacturers to retailers is not for the purpose of drawing customers' attention alone but the promotion often results in a dramatic increase in the amount of product sold by the manufacturer to the retailer.

Option B - Incorrect:
The passage wasn't specific about the duration of time of advertisement.

Option C - Incorrect:
We do not know about products that are not newly introduced to the market as the argument is not based on what this option conveys.

Option D - Correct:
As a result of the promotion offered by manufacturers to retailers, which leads to an increase in the number of products sold by manufacturers at a discount rate, retailers have access to accumulate inventories for the purpose of resale. Hence, this option is correct.

Option E - Incorrect:
We can't validate any fact from the passage to back up this option because the argument is concerned about manufacturer's profit.