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 Post subject: GMAT Verbal
PostPosted: Fri May 24, 2013 8:12 am 
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Although sales of luxury goods sharply decreased immediately following the stock market crash, sales of such goods have since doubled. If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on their luxury goods for recession-wary consumers.

If the statements above are true, which of the following can be inferred?
A. The increase in luxury purchases can most likely be attributed to recent improvements in the state of the economy.
B. After the stock market crash, consumers were afraid to make major purchases, especially of luxury goods.
C. Retailers of luxury goods are currently offering no discounts on their products.
D. The stock market crash resulted in an over 50 percent decrease in sales of luxury goods.
E. The economy would be more stable if all retailers offered additional discounts on their products during economic recessions.


(D) This question asks you to find the statement that can be inferred from the passage, assuming that the statements in the passage are all true. The passage gives us three key pieces of information: that sales of luxury goods declined following a stock market crash; that sales of such goods have doubled since then; and that the market has still not returned to its original pre-recession state. It is also suggests that retailers should begin offering discounts on their products in order to boost sales.

Choice (A) cannot be inferred from these statements alone. The passage only provides information about what happened, not why it happened; we cannot properly infer the cause of the increase in sales from just these statements. Choice (A) is not supported by the passage, so it can be eliminated.

Choice (B) is also unsupported by the passage. The passage describes a correlation between the stock market crash and a decrease in sales of luxury goods, but we cannot infer causation from correlation, so it is incorrect to assume that the decrease in sales was the result of consumers being afraid to spend money following the market crash. “Afraid” implies a fear, but the essay doesn't say that consumers were scared, so this inference is reaching. Choice (B) can be eliminated.

Choice (C) cannot be inferred from the passage, either. The passage states that retailers must offer “significant” discounts on their luxury goods; this leaves room for the possibility that these retailers are already offering discounts (that are too small to be considered “significant” by the author). Choice (C) is thus not supported by the statements in the passage; we can go ahead and eliminate it.

Choice (E) can also be eliminated; the conclusion it draws is far too broad considering the limited information we are given in the passage, which only pertains to luxury goods.

Choice (D) presents a statement that can be directly inferred from the passage. If sales of luxury goods have still not returned to their pre-recession levels despite a 50 percent increase in sales since the market crash, then it must be true that the market for luxury goods saw a 50+ percent decrease in sales following the stock market crash. If it is helpful, you can use the “plug-in” tactic to better visualize what's happening here. Let's say that pre-recession, the luxury goods market was seeing $100 million in sales. If sales of luxury goods have still not returned to where they were to begin with, then current sales must be less than $100 million. If that is the case, then sales must have declined to less than $50 million after the crash, if they equal less than $100 million when doubled. A drop from $100 million to less than $50 million equals an over 50 percent decrease in sales. As you see, the information presented in Choice (D) can be directly inferred from the passage. Choice (D) is therefore the best choice.
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I am not convinced by the answer because there is no correlation given about the 50 % decrease relation.
Please elaborate the answer to me again. Thank you.


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 Post subject: Re: GMAT Verbal
PostPosted: Fri May 24, 2013 8:13 am 
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Quote:
I am not convinced by the answer because there is no correlation given about the 50 % decrease relation.
Please elaborate the answer to me again. Thank you.
This question attempts to trick you into drawing unsupported conclusions when really the answer is simple. All the incorrect choices are based on assumptions or information that are not contained in the passage. The only actual facts we have to work with are that sales decreased after the recession, have since doubled, but are still not back to their previous levels. With this information, Choice D is simple arithmetic. If sales have doubled but aren't at their previous level then they must have been halved by the recession.


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