Q14 - In an effort to boost

[kopoku.08]

I don't see how (c) (or any of these is the right answer. I would think a fair assumption would be that if the production of of foamy soda went up, this cost would be shifted to the customer and that would depress sales.

i can also see that being an assumption that lsac would expect us to make on any other question.

[ohthatpatrick]

This is a Resolve/Explain EXCEPT question, meaning four incorrect answers will reconcile our paradox, and one incorrect answer will not do anything to clarify the apparent discrepancy.

What is the paradox?

I. Foamy Soda lowered its prices during a typically busy sales period
(Expected result: Sales numbers would go up in response to the lowered prices)
YET
II. Sales of Foamy Soda dropped during that period

The rationale you offered for (C) makes sense on its own: i.e., a company whose production costs rise may certainly decide to raise the price of its merchandise.

But we know from the original paradox that Foamy did NOT raise its price. In fact, half of our paradox is that Foamy lowered its price. We can't change that fact. Since we know Foamy had lower prices during the summer, (C) doesn't give us a way to explain why sales went down.

A) explains why sales dropped by pointing out that the entire industry had lower than typical sales.

B) explains why Foamy's lower prices didn't help sales by pointing out that competitors lowered prices even more than Foamy did, making their products more appealing to consumers.

D) explains why sales numbers dropped by pointing out that many suppliers of Foamy soda did not have any/enough Foamy in their inventory to meet the potential demand from consumers.

E) just like (A), explains why sales dropped by pointing out that demand for soft drinks overall was down during the summer period.


Hope this helps. Let me know if you have lingering qualms/questions.

[kopoku.08]

i think that generally makes sense but if a question says we can accept the answers choices as true, why are we not allowed to accept the idea that the prices were later on raised which would then resolve the paradox and make (c) incorrect?

[timmydoeslsat]

i think that generally makes sense but if a question says we can accept the answers choices as true, why are we not allowed to accept the idea that the prices were later on raised which would then resolve the paradox and make (c) incorrect?

We are to accept as true that production costs went up during the summer months. However, the discrepancy in our stimulus is that during the summer months, FS attempted to boost sales by lowering the price. So we know that FS lowered its price in the summer months. Whatever happens after the summer months or "later" is irrelevant to resolving this paradox. Why was it the case that during the summer months, when the price was lowered, that sales dropped?

Answer choice C is irrelevant for why sales dropped.

[ohthatpatrick]

I obviously agree with Timmy that, for this question, the way they've framed this Paradox precludes us from believing that Foamy raised its prices during the summer months.

But I want to add that I would even be a little wary of saying that, on its own, LSAC would expect us to read (C) and common-sensically assume that an increase of production costs means that the price went up. It's certainly plausible, but not necessarily probable.

Someone else might read (C), on its own, and common-sensically assume that Foamy's price remained the same, and therefore its profit margin has gone down due to the increased production costs.

To me, neither one of those interpretations of (C) is more likely than the other, so it's hard to make any commonsense inference other than "unless Foamy raised its prices, its profit margin has gone down".

[slimz89]

maybe i could shed some light as to why C does not resolves this paradox.
passage says in order to boost sale fs lowered prices, but in spite of this sales dropped during the summer.

C says that productions cost went up during the summer. You might take for granted that the expenses incurred by the company automatically go on to the consumer and they raised the prices. 2 reasons why this is wrong
1. Thats adding too much outside information to the passage
2. The passage specifically state "in spite of this", which i understood that the prices lowered...stayed lowered and no matter what additional information the answers included.

hope that helps

[Hiba S478]

I thought that C was right because the overall question is not talking about an increase in revenue but the amount of sales (amount of sales does not have to be directly related to the amount of income) so just because cost productions (expenses) went up doesn't give reasoning to way sales went down.