Coton Prices!!

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Coton Prices!!

by Ozlemg » Fri Jul 15, 2011 3:11 am
Insect infestations in certain cotton-growing regions of the world have caused dramatic increases in the price of cotton on the world market. By contrast, the price of soybeans has long remained stable. Knowing that cotton plants mature quickly, many soybean growers in Ortovia plan to cease growing soybeans and begin raising cotton instead, thereby taking advantage of the high price of cotton to increase their income significantly, at least over the next several years.

Which of the following, if true, most seriously weakens the plan's chances for success?

(A) The cost of raising soybeans has increased significantly over the past several years and is expected to continue to climb.
(B) Tests of a newly developed, inexpensive pesticide have shown it to be both environmentally safe and effective against the insects that have infested cotton crops.
(C) In the past several years, there has been no sharp increase in the demand for cotton and for goods made out of cotton.
(D) Few consumers would be willing to pay significantly higher prices for cotton goods than they are now paying.
(E) The species of insect that has infested cotton plants has never been known to attack soybean plants
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by Frankenstein » Fri Jul 15, 2011 3:32 am
Hi,
Insects --> supply reduced --> dramatic increase in price.

So, if these insects can be killed, supply can be increased. Moreover, if pesticides are inexpensive, growers need not spend more money as well. So, prices can reduce because of increase in supply.
B is saying the same thing.
C can be a contender but there is no sharp increase in the demand for cotton doesn't mean there will be sudden sharp decrease in demand from now. If there is a sudden sharp decrease in demand from now, then the prices can fall. So, B is a better weakener.
Hence, B
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by beatthegmat.garry » Fri Jul 15, 2011 4:50 am
Right Frankenstein !!

I also think A is the correct choice. But just for my understanding 'C' was never a contender since it cites the trend in the past which cannot be used to predict the future assuming insect infestation (or other calamity) never occurred before.

Also let me know what you think about 'D' as a possible contender although not that strong as going ahead if few consumers opt for cotton product than as of present then the price may not increase.

Thanks for reading !

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by garima99 » Wed Jul 20, 2011 3:19 am
Ozlemg wrote:Insect infestations in certain cotton-growing regions of the world have caused dramatic increases in the price of cotton on the world market. By contrast, the price of soybeans has long remained stable. Knowing that cotton plants mature quickly, many soybean growers in Ortovia plan to cease growing soybeans and begin raising cotton instead, thereby taking advantage of the high price of cotton to increase their income significantly, at least over the next several years.

Which of the following, if true, most seriously weakens the plan's chances for success?

(A) The cost of raising soybeans has increased significantly over the past several years and is expected to continue to climb.
(B) Tests of a newly developed, inexpensive pesticide have shown it to be both environmentally safe and effective against the insects that have infested cotton crops.
(C) In the past several years, there has been no sharp increase in the demand for cotton and for goods made out of cotton.
(D) Few consumers would be willing to pay significantly higher prices for cotton goods than they are now paying.
(E) The species of insect that has infested cotton plants has never been known to attack soybean plants
B because the cause is no longer existing if B is true