Question: First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.
If the statements above are true, which of the following is most strongly supported by them?
(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers.
(B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year.
(C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year.
(D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year.
(E) PXC's production costs for its computers were lower last year than they had been the previous year.
“First-time computer buyers buying PXC home computers typically buy” - is a GMATquestion about critical thinking. A candidate may choose to either find evidence that would undermine the argument or present an argument that is illogical in order to respond to the question. The GMAT critical reasoning gauges a candidate's aptitude for logic and analysis. Candidates must identify the argument's advantages and disadvantages as well as its logical flaws for this topic. Out of the 36 GMAT verbal questions, 10–13 critical reasoning questions are found.
Answer: D
Explanation:
PXC home computers purchased by first-time computer buyers frequently come in much lower price ranges and with lower profit margins. This is said when compared with each computer than PXC computers purchased by those upgrading to more potent models. The same number of PXC computers were sold, and the prices and profit margins for each computer model that PXC sells. But still last year's profits from computer sales were significantly higher than the previous year.
Let us analyze each option separately to find the correct answer that fits the requirement posted in the question.
Option A : Incorrect
According to this option, PXC computers are more appealing to first-time computer buyers because PXC's rivals increased the price of their computers last year. However, the quantity of PXC computers sold remained the same. As a result, this option is ruled out.
Option B : Incorrect
Last year, more PXC computer buyers than the year before also purchased PXC printers and other PXC computer-related goods. This is not relevant. Other products were not mentioned in the query. As a result, this option is ruled out.
Option C : Incorrect
According to this option, more people who purchased a PXC computer to replace their old one did so in 2017 than they did in 2016. These people were replacing computers made by PXC's competitors. This is irrelevant because it says nothing about PXC's increased profits. As a result, this option is ruled out.
Option D : Correct
According to this option, fewer first-time computer buyers purchased PXC computers last year than they did the year before. Since there are fewer first-time buyers, there are more replacement buyers, and since sales are steady, the replacement sales led to higher profits. As a result, this option is the right answer.
Option E : Incorrect
According to this option, PXC's computer production costs were lower in 2017 than they were in 2016. Profit margins are unchanged. As a result, this option is ruled out.
From the explanations given above, it is clear the fourth option is the perfect choice.
Suggested GMAT Critical Reasoning Samples
- A management protocol system that offers a unique method for the administration GMAT Critical Reasoning
- The year after a company whose success depends on product innovation has a profitable year GMAT Critical Reasoning
- Beginning in 1997, high school seniors in State Q have been required to pass a comprehensive proficiency exam GMAT Critical Reasoning
- Superconductors are Substances that Conduct Electricity GMAT Critical Reasoning
- Environmentalists Associated with the United Nations Environment Programme GMAT Critical Reasoning
- Dear Applicant: Thank you for Your Application GMAT Critical Reasoning
- Pressure Flaking was a Technique used by Early Men to make Sharp-Edged Tools GMAT Critical Reasoning
- Most Disposable Plastic Containers are Now Labeled With a Code Number GMAT Critical Reasoning
- Attention Deficit Disorder (ADD) is a Condition Characterized by an Inability to Focus on any Topic GMAT Critical Reasoning
- A Diet High in Saturated Fats Increases a Person's Risk of Developing Heart Disease GMAT Critical Reasoning
- Airline: Newly Developed Collision-Avoidance Systems GMAT Critical Reasoning
- Experienced Pilots often Have More Trouble than Novice Pilots in Learning to Fly GMAT Critical Reasoning
- Two Types of Earthworm, One Black and One Red-Brown, Inhabit the Woods GMAT Critical Reasoning
- Every Action has Consequences and Among the Consequences of any Action GMAT Critical Reasoning
- Without Information that could Only have Come from Someone Present at the Secret Meeting GMAT Critical Reasoning
- Carol is Shorter Than Juan, But She is Taller than Ed GMAT Critical Reasoning
- Building a Space Station, in Which Astronauts Would Live For a Considerable Time GMAT Critical Reasoning
- Manufacturers are Now Required to Make All Cigarette Lighters Child-Resistant GMAT Critical Reasoning
- Our School District Should Not Spend its Money on the New Verbal Advantage Reading Program GMAT Critical Reasoning
- Many Large Department Stores in Montalia Now Provide Shopping Carts GMAT Critical Reasoning
Comments