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by [email protected] » Fri May 11, 2012 10:39 am
Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufacturers' share of the industry's revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairers) had their share increase from 20 percent to 30 percent.

Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?

A. The possibility is left open that the statistics for manufacturers' share of revenues come from a different source than the other statistics.

B. No matter what changes the automobile industry's overall revenues undergo, the total of all shares of these revenues must be 100 percent.

C. No explanation is given for why the revenue shares of different sectors of the industry changed.

D. Manufacturers and parts companies depend for their revenue on dealers' success in selling cars.

E. Revenues are an important factor but are not the only factor in determining profits.

The OA is B.

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Source: — Critical Reasoning |

by agarwalva » Fri May 11, 2012 4:59 pm
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by Birottam Dutta » Fri May 11, 2012 9:22 pm
Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufacturers' share of the industry's revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairers) had their share increase from 20 percent to 30 percent.

Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?

A. The possibility is left open that the statistics for manufacturers' share of revenues come from a different source than the other statistics. Not relevant

B. No matter what changes the automobile industry's overall revenues undergo, the total of all shares of these revenues must be 100 percent. This exactly exposes the weakness of the argument because it says that whatever the increase or decrease, the sum will always be 100%. We need numbers and not percentages and a comparison with other industries to get the true picture!

C. No explanation is given for why the revenue shares of different sectors of the industry changed.This again does not address automobile industry vis a vis other industries. To get the true picture, we need to assess automobile industry with other industries, and not with its own sub-industries.

D. Manufacturers and parts companies depend for their revenue on dealers' success in selling cars. This statement does not do anything for the conclusion drawn in the argument that declines in automobile-industry revenues are exaggerated
E. Revenues are an important factor but are not the only factor in determining profits. Argument does not talk about profits
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by metallicafan » Fri May 11, 2012 10:39 pm
+1 B

The statistics should show in concrete numbers that the revenues have not decreased. For example, it should show that the revenues were $1 billion last year and $ 2 billion in this year.
If you only add the shares, you always will get the same result: 100%. In every scenario (higher or lower revenues). This is not a measure of change.
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