Economist: To increase timber exports and enhance the country’s brand name for timber, the government of Targania has

[BTGmoderatorDC]

Economist: To increase timber exports and enhance the country’s brand name for timber, the government of Targania has planned to reduce the price at which it exports timber and has, therefore, reduced the price at which it buys timber from local manufacturers and their corresponding timber suppliers. Even though the plan will achieve its goal, because of the lower profit margins, it will also lead to a decline in profits on the processed timber sold by local manufacturers. Therefore, in the interest of the local manufacturers, the government must shelve the plan to increase the exports.

Which of the following, if true, casts the most doubt on the economist’s recommendation?

(A) A recent survey by one of the most prominent trade magazines has suggested that a few other countries are also planning to cut down their timber prices in the international market.
(B) Targania’s new export price is above the minimum price limit of export timber imposed by the International Timber Export Countries Association (ITECA), a price below which no country is allowed to export timber.
(C) The government of Targania can increase both exports and its brand by spending money on advertising rather than reducing prices.
(D) The increased brand value of Targania’s timber due to the increased exports leads to a proportionate increase in the scope for local manufacturers to aggressively market new timber products to foreigners at exorbitant prices.
(E) Well-optimized cost cutting measures have helped local manufacturers to maintain decent profits so far.


OA D

Source: e-GMAT