QUESTION TEXT: For a ten-month period, the total monthly…
QUESTION TYPE: Must be False
- New car sales in Calistan were constant over a ten month period.
- Marvel’s monthly sales of new cars doubled over this period and Marvel’s market share of new car sales doubled.
- At the end of the ten month period Calistan imposed emissions controls.
- In the following three months Marvel’s market share declined greatly even though its sales remained constant.
ANALYSIS: Clearly the new car market grew. That’s the only way to explain Marvel’s declining share when its sales stayed the same.
- CORRECT. This can’t be true. At least some car companies had to increase their sales. The overall market grew.
- This is possible since it happened before Marvel’s decline of market share.
- This is possible. Maybe Marvel cars are actually quite environmentally friendly and it was some other factor that caused Marvel’s decline.
- This is possible in the long run. We have no idea whether more or less cars will be sold.
- This is possible. A company can increase its profit even if its market share declines.
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I’m confused, wouldn’t it be possible for A to be true if monthly sales are reported in units sold while market share is reported in dollars (which to my knowledge is not unreasonable since both units and dollars are potentially useful indicators)? Marvel could sell the same number of cars at a lower cost per car, thus reducing their market share as a percentage of dollars in the market. If every car manufacturer where to do this, they could all sell their cars for less than before, some selling then at less of a cut than Marvel. The monthly sales of companies other than Marvel could decrease over the 3 months following the imposition of the emission standards contrary to the choice of selecting A without violating the requirements listed in the prompt.
Is there some underlying assumption about business or safe assumptions that I’m missing? I’d have a hard time getting this question without just eliminating the worse options and hoping I didn’t make a mistake.
FounderGraeme Blake says
>I’m confused, wouldn’t it be possible for A to be true if monthly sales are reported in units sold while market share is reported in dollars (which to my knowledge is not unreasonable since both units and dollars are potentially useful indicators)?
You’re thinking too hard. The question doesn’t make this distinction. So it doesn’t make sense for us to go assuming that reporting figures must be a certain way.
The default assumption is that the figures quoted are comparable. Otherwise, this set of facts loses meaning. The LSAT is big on the principle of charity, where you give statements their most reasonable interpretation.
This isn’t an argument, but it still makes sense to interpret the facts in their most coherent way.