PrepTest 148, Section 1, Question 2
Five years ago, the hair dryer produced by(73 more words not shown)
The reasoning in the argument(5 more words not shown)
- Amistakes a decline(19 more words not shown)
- Bdoes not provide(14 more words not shown)
- Cfails to discuss(11 more words not shown)
- Doverlooks the possibility(17 more words not shown)
- Eprovides no independent(14 more words not shown)
Reading the argument
A smaller slice of a much bigger market could mean more hair dryers sold.
Suppose the nationwide market was ten million hair dryers five years ago. Wilson's 50 percent share would mean five million dryers. Now suppose the market has grown to one hundred million. Wilson's current 25 percent share would mean twenty-five million dryers. The share has been cut in half, but Wilson is selling five times as many units.
What we’re looking for
For the flaw, focus on why the unchanged net income per dryer doesn't solve that problem. It tells us how unit sales translate into earnings, but we still don't know how many units Wilson sold. In our example, the same income on each of many more dryers would produce more total income, not half as much.
Working the answers
- ACorrect
The argument confuses Wilson's percentage of the market with its number of sales. Half the old share doesn't mean half the old sales unless the total market stays the same. A growing market could leave Wilson selling just as many dryers or more, despite its reduced share. With net income per dryer unchanged, that would defeat the conclusion that income from the product must have fallen by half.
- B
We don't need the exact dollar amount Wilson makes on each dryer to see the problem. We're told that amount hasn't changed. If we knew sales had halved, constant income per unit would let us infer that total income halved too, whether the income per dryer was five dollars or ten. What we lack is the sales quantity, not a specific profit figure for every manufacturer.
- C
The conclusion concerns net income from this product—the hair dryer. Income from washing machines, dishwashers, or other Wilson products could rise or fall without settling what happened to hair-dryer income. We would need those other figures for a conclusion about the whole company's income, but that isn't the conclusion here.
- D
A higher retail price doesn't override the explicit fact that net income per dryer stayed the same. Increased costs or other factors could offset the higher price. The amount Wilson keeps per unit is already fixed by the premise; the unresolved question is how many units it sold.
- E
We don't need to rank the hair dryer against Wilson's other products. Even if it were the company's most profitable product, least profitable product, or somewhere in between, its income could change over time. The argument is about that change, not its place in a product ranking.
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