Market analyst Jennifer Chen investigated consumer purchasing patterns for a 2023 report on pricing strategies. Chen hypothesized that reducing produc...
GMAT Information and Ideas : (Ideas) Questions
Market analyst Jennifer Chen investigated consumer purchasing patterns for a 2023 report on pricing strategies. Chen hypothesized that reducing product prices would consistently lead to increased sales volumes across different market segments. Her team gathered quarterly data from five product categories:
- Product Category A: Price reduced by 15%, sales volume increased by 8%
- Product Category B: Price reduced by 25%, sales volume decreased by 12%
- Product Category C: Price reduced by 10%, sales volume increased by 35%
- Product Category D: Price reduced by 20%, sales volume decreased by 5%
- Product Category E: Price reduced by 30%, sales volume decreased by 18%
Chen's analysis revealed that price reductions did not reliably predict sales performance.
Which choice most effectively uses data from the report to support Chen's conclusion?
Product Categories B and E both experienced significant price reductions but showed declining sales volumes, contradicting expectations about price sensitivity.
Product Category B underwent a substantial \(25\%\) price reduction yet experienced a \(12\%\) decline in sales volume, while Product Category C had only a modest \(10\%\) price reduction but achieved the strongest sales growth of \(35\%\).
Product Category A demonstrated the expected relationship between price reduction and sales growth, with a \(15\%\) price cut leading to increased volume.
Product Categories C and A both showed sales increases following price reductions, while Product Categories B, D, and E all experienced sales declines despite lower prices.
Step 1: Decode and Map the Passage
Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| "Market analyst Jennifer Chen investigated consumer purchasing patterns for a 2023 report on pricing strategies." |
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| "Chen hypothesized that reducing product prices would consistently lead to increased sales volumes across different market segments." |
|
| "Her team gathered quarterly data from five product categories:" |
|
| "Product Category A: Price reduced by 15%, sales volume increased by 8%" |
|
| "Product Category B: Price reduced by 25%, sales volume decreased by 12%" |
|
| "Product Category C: Price reduced by 10%, sales volume increased by 35%" |
|
| "Product Category D: Price reduced by 20%, sales volume decreased by 5%" |
|
| "Product Category E: Price reduced by 30%, sales volume decreased by 18%" |
|
| "Chen's analysis revealed that price reductions did not reliably predict sales performance." |
|
Passage Architecture & Core Elements
Main Point: Chen's research demonstrated that reducing product prices does not consistently lead to increased sales volumes, contradicting the initial hypothesis.
Argument Flow: The passage establishes Chen's hypothesis that price reductions would consistently boost sales across market segments. It then presents mixed data from five product categories showing both positive and negative relationships between price cuts and sales. This contradictory evidence leads to Chen's conclusion that price reductions are not reliable predictors of sales performance.
Step 2: Interpret the Question Precisely
This is a fill-in-the-blank question asking us to choose the best logical connector. The answer must create the right relationship between what comes before and after the blank.
Step 3: Prethink the Answer
- The right answer should use specific data points to show that price reductions don't create predictable sales patterns
- It should highlight examples where the relationship between price cuts and sales either varies dramatically or works in unexpected ways
- The strongest evidence would show cases where larger price cuts performed worse than smaller ones, or where similar price cuts produced very different results
Product Categories B and E both experienced significant price reductions but showed declining sales volumes, contradicting expectations about price sensitivity.
- Points out that Categories B and E had big price cuts but declining sales
- This shows price cuts don't always work, but only gives one side of the story and doesn't show the full inconsistency pattern
Product Category B underwent a substantial \(25\%\) price reduction yet experienced a \(12\%\) decline in sales volume, while Product Category C had only a modest \(10\%\) price reduction but achieved the strongest sales growth of \(35\%\).
- Contrasts Category B (\(25\%\) price cut, \(12\%\) sales decline) with Category C (\(10\%\) price cut, \(35\%\) sales increase)
- Shows that smaller price reduction actually performed much better than larger reduction
- This directly demonstrates the unreliable relationship between price cuts and sales by showing the exact opposite of what you'd expect
Product Category A demonstrated the expected relationship between price reduction and sales growth, with a \(15\%\) price cut leading to increased volume.
- Only mentions Category A, which actually supported Chen's original hypothesis
- This evidence would argue against her conclusion, not support it
Product Categories C and A both showed sales increases following price reductions, while Product Categories B, D, and E all experienced sales declines despite lower prices.
- Simply lists which categories went up and which went down without highlighting the key inconsistencies that make the conclusion compelling