QUESTION TYPE: Identify the Conclusion
CONCLUSION: Retailers use price cuts too often.
REASONING: Price cuts reduce profit margins. This is true even though price cuts make consumers feel lucky.
ANALYSIS: The word “but” is a conclusion indicator. On an easier “identify the conclusion” question, that’s all you would need to look for.
But here, the word “but” is used twice. So you have to use common sense and think about why the author is saying things. A good question to ask is “why are they telling me this?”.
Another useful question is: “which statement supports the other statement?”. Here are the two statements that came after the word “but”:
- Retailers use price cuts too much.
- Price cuts hurt profit margins.
If you think about it, the second one supports the first. You shouldn’t cut prices too much because price cuts hurt profit margins. The other way around doesn’t make sense. (The second bullet refers to the general effect of price cuts, no matter how often they are used.)
- This is context provided to show why retailers use price cuts.
- This is also context to show why retailers provide price cuts.
- CORRECT. See the analysis above.
- This is a subsidiary conclusion that supports the conclusion. An individual sale will cut profit margins. So if retailers do too many sales, they will lose profits.
- This answer contradicts the argument! The second sentence said “Retailers use this fact [making consumers feel lucky] to their advantage….”.
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