Urban economic analysts theorized that the shutdown of major discount retail chains in city areas led to higher revenue at...
GMAT Information and Ideas : (Ideas) Questions
Urban economic analysts theorized that the shutdown of major discount retail chains in city areas led to higher revenue at local neighborhood shops. Major discount retail chains generally do not funnel customers toward neighborhood establishments but do draw price-sensitive consumers, who constitute the main clientele for local shops.
Which discovery, if accurate, would most directly validate the analysts' theory?
Price-sensitive consumers have expanded their buying from local shops as major discount retail chains have shut down in city areas.
Local neighborhood shops in regions containing both discount retail chains and community businesses generally achieve greater revenue than shops in regions with exclusively community businesses.
Rivalry between discount retail chains and local shops had significantly intensified prior to the retail shutdowns commencing.
Revenue growth at local shops correlates with reduced accessibility of affordable shopping alternatives in different retail sectors.
Step 1: Decode and Map the Passage
Create Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| 'Urban economic analysts theorized that the shutdown of major discount retail chains in city areas led to higher revenue at local neighborhood shops.' |
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| 'Major discount retail chains generally do not funnel customers toward neighborhood establishments but do draw price-sensitive consumers, who constitute the main clientele for local shops.' |
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Provide Passage Architecture & Core Elements
Main Point: Urban analysts believe that when discount chains shut down, local neighborhood shops earn more money because the chains' price-sensitive customers will shop locally instead.
Argument Flow: The passage presents an economic theory linking discount chain closures to increased local shop revenue. The theory is supported by explaining that discount chains attract the same customer base that primarily shops at local establishments.
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 theory claims that discount chain shutdowns lead to higher local shop revenue because chains attract price-sensitive consumers who are the main customers of local shops
- So the right answer should show that price-sensitive consumers actually moved their business from closed discount chains to local neighborhood shops
Price-sensitive consumers have expanded their buying from local shops as major discount retail chains have shut down in city areas.
- This directly shows price-sensitive consumers expanding their buying from local shops as discount chains shut down
- This is exactly what the theory predicts
Local neighborhood shops in regions containing both discount retail chains and community businesses generally achieve greater revenue than shops in regions with exclusively community businesses.
- This compares revenue in different types of regions rather than showing what happens when chains shut down
- Doesn't address the shutdown scenario
Rivalry between discount retail chains and local shops had significantly intensified prior to the retail shutdowns commencing.
- This describes rivalry before shutdowns, not what happened after shutdowns
- Doesn't provide evidence about customer behavior following closures
Revenue growth at local shops correlates with reduced accessibility of affordable shopping alternatives in different retail sectors.
- This is too general about affordable shopping alternatives rather than specifically about discount chain shutdowns