The Percentage of Households with an Annual Income of More Than $40,000

Question: The percentage of households with an annual income of more than $40,000 is higher in Merton County than in any other county. However, the percentage of households with an annual income of $60,000 or more is higher in Sommer County.

If the statements above are true, which of the following must also be true?

(A) The percentage of households with an annual income of $80,000 is higher in Sommer County than in Merton County.
(B) Merton County has the second highest percentage of households with an annual income of $60,000 or more.
(C) Some households in Merton County have an annual income between $40,000 and $60,000.
(D) The number of households with an annual income of more than $40,000 is greater in Merton County than in Sommer County.
(E) Average annual household income is higher in Sommer County than in Merton County.

“The percentage of households with an annual income of more than $40,000” – is a GMAT critical reasoning topic. This GMAT Critical Reasoning topic has been taken from the book ‘The Official Guide for GMAT Review’. In this particular topic, candidates are asked to select the option that makes the same error as the author. In this question, the candidates need to provide an option that supports the error provided in the passage. GMAT critical reasoning tests the logical and analytical skills of the candidates. Critical reasoning in GMAT requires candidates to find the argument's strengths and weaknesses or the logical flaw in the argument. The GMAT CR section contains 10 -13 GMAT critical reasoning questions out of 36 GMAT verbal questions.

Answer: C
Explanation: This is a GMAT critical reasoning question. An assumption is an implied hypothesis. This is a pseudo-syllogistic argument, so we need to check the fact and opinions to get to a conclusion:

The percentage of households with an annual income of more than $40,000 is higher in Merton County than in any other county. However, the percentage of households with an annual income of $60,000 or more is higher in Sommer County.

Hypothesis: The percentage of households with an annual income of more than $40,000 is higher in Merton County (MC) than in any other county.
The number of households is not mentioned. It states "more than $40,000", this implies the annual income which is an approximation.

Conclusion: The percentage of households with an annual income of $60,000 or more is higher in Sommer County (SC).
The percentage of income is not mentioned in absolute numbers. The boundary figure is mentioned ("$60,000 or more").

Option A: Incorrect

This statement provides data on a higher percentage of annual income between $60k and $80k.
Sommer County could have higher percentages of households earning $60k+. Hence option (A) must be eliminated.

Option B: Incorrect

This statement states about a third country. It has a higher income percentage around $60k more than Merton County. This third county has a higher percentage of income above $40k than Merton County. Option (B) might be true, but it does not follow the argument.

Option C: Correct

Option C is a logical statement. Merton county has a greater percentage of household income which is above $40 K. Sommer County has a household income percentage of around $60 K. This statement shows between $ 40–60 K which implies the more household income in Merton County and the earning group between $40 - 60 K. It appears that Sommer County has a greater percentage of households earning above $40 K. So if we consider $40 K above the percentage for Merton County without changing the fact that $60 K and above is the percentage for Sommer County. Then the range of $40 to 60 K may see higher. The statement in option (C) is true. So, this statement is the correct answer.

Option D: Incorrect

The percentage of income is not mentioned in absolute numbers. Sommer County might have a much greater population than Merton County. so option (D) is not true. Eliminate option (D).

Option E: Incorrect

This might be true, but it depends on the information we are not given. Sommer County might have a small percentage earning above $60k while Merton County has no households earning above $60k. So option (E) is not true. Eliminate option (E).

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