Explain the apparently surprising result - GPREP1

[viveksunder.vs]

Denoma, a major consumer-electronics maker, had a sizeable decline in sales revenue for its most recent fiscal year. This result appears surprising, because electronics retailers report that although their overall sales were considerably lower than in the previous year, their sales revenue from Denoma models actually grew, largely thanks to some innovative and popular models that Denoma introduced.
Which of the following, if true, does most to explain the apparently surprising result?

A. Because of the need to educate the public about its new models’ capabilities, Denoma’s advertising spending was higher than normal over the period.
B. For the period at issue, Denoma’s major competitors reported declines in revenue that were, in percentage terms, greater than Denoma’s.
C. A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers.
D. Unlike some of its major competitors, Denoma has no lines of business outside consumer electronics to provide revenue when retail sales of consumer electronics are weak.
E. During the period, consumer-electronics retailers sold remaining units of Denoma’s superseded models at prices that were deeply discounted from those models’ original prices.

Could you please explain as to why E is incorrect? I just cant figure out a good reason to eliminate E, expect for the reason that E states ' remaining units' and we have no information regarding the actual NUMBER of remaining units.

[RonPurewal]

note this text:

their sales revenue from Denoma models actually grew, largely thanks to some innovative and popular models that Denoma introduced.

i'm not sure whether there's a language barrier at work here, but the idiomatic expression "thanks to" means "because of".
also, "largely" means "almost entirely".

so, translated, we have
their sales revenue from Denoma models actually grew, almost entirely because of to some innovative and popular models that Denoma introduced.

now remember, PREMISES DON'T LIE.
so, even if choice (e) is true, these deep-discounted models accounted for only a small fraction of the retailers' sales revenue - because, as stated in the passage, the clear majority of that sales revenue came from the "innovative" new models.

--

choice (c) is the favorite here.

REMEMBER WHAT YOU SHOULD DO ON PROBLEMS LIKE THESE:
FIRST, MAKE EXPLICIT EXACTLY WHAT THE "SURPRISING RESULT" IS.
in this case, the "surprising result" is the fact that, SIMULTANEOUSLY, denoma's sales revenues decreased while the retailers' sales from denoma increased (largely because of NEW models).

choice (c) provides a good rationalization: the other part of denoma's revenue (the part from making parts for other companies) decreased. this would not have affected the retailers' revenue from denoma products, because the retailers don't sell the parts.

[sangeethmani]

In option E the models may have been sold for deeply discounted prices but there is still a mention of high sales revenue in the store. Hence this does not solve the discrepancy.

[RonPurewal]

In option E the models may have been sold for deeply discounted prices but there is still a mention of high sales revenue in the store. Hence this does not solve the discrepancy.

that's not really why choice (e) is incorrect, though.
choice (e) is incorrect because it has nothing to do with the surprising result that is actually mentioned in the passage!

i.e., the surprising result that is actually mentioned in the passage is that sales revenue "grew, largely thanks to some innovative and popular models that Denoma introduced".
therefore, in order to explain this result adequately, we need to have some sort of fact that actually pertains to these innovative and popular models.

choice (e) would explain increased sales figures for the discounted models. however, since those were "superseded models" -- i.e., old models -- any such increases in the sales of those models would be totally irrelevant to the situation that we're trying to explain.

[s.ashwin.rao]

Ok may be C is right but What's wrong with A? Some people may claim that it deals with revenues and not profits so what? Obiviously since Denoma spent money on advertising their profits went down...

[jnelson0612]

Ok may be C is right but What's wrong with A? Some people may claim that it deals with revenues and not profits so what? Obiviously since Denoma spent money on advertising their profits went down...

The situation that must be explained is why Denoma's revenues went down even though retailers reported that their revenue from the sale of Denova's products rose. The whole argument is about revenues, not profits, so any expenses Denoma had such as advertising are not relevant to explaining this odd situation.

[davetzulin]

quick question on E. I striked this option because I thought that the normal manufacturer/retailer relationship should be understood by the test taker

if the retailer discounted any of the products it sells, there should be no effect on the manufacturer's revenue. unless i'm mistaken, the retailer buys items from the manufacturer at whatever price and subsequently can sell at whatever price, even a loss, if they so wish.

so i thought this would be irrelevant to any explanation of the manufacturer's revenue.

what should i assume about this manufacturer/retailer relationship?

[catennacio]

In option E the models may have been sold for deeply discounted prices but there is still a mention of high sales revenue in the store. Hence this does not solve the discrepancy.

that's not really why choice (e) is incorrect, though.
choice (e) is incorrect because it has nothing to do with the surprising result that is actually mentioned in the passage!

i.e., the surprising result that is actually mentioned in the passage is that sales revenue "grew, largely thanks to some innovative and popular models that Denoma introduced".
therefore, in order to explain this result adequately, we need to have some sort of fact that actually pertains to these innovative and popular models.

choice (e) would explain increased sales figures for the discounted models. however, since those were "superseded models" -- i.e., old models -- any such increases in the sales of those models would be totally irrelevant to the situation that we're trying to explain.

Hi Ron,

I got C by relating the logic of the takeaway I got from you somewhere: General trends doesn't apply to specific case, or result of a part is not necessarily the result of a whole, and vice versa.

Here, the whole is the total revenue of Denomo, while the part A is the revenue coming from Denomo's own product line. The argument states that while the part's revenue increases, the whole's revenue decreases. So there must be some decreases from other larger parts (not A) (of the whole), because A + not A equal whole.

Can I reason the argument like that? I actually prephrased the argument prior to answering the question, do I have to be careful next time because if I go with that direction I eliminate all other logics? Is it the logic underlying this argument? Thanks!

[bbharuka]

Hi Ron,

I understand why C is the right choice. But I have a doubt regarding choice B. Why is B out of scope?

Is it not possible that the industry as a whole is performing very badly. Because of the innovative new designs, whatever little market was there was absorbed by Deno, which increased Deno's sales from that particular segment. Maybe overall performance of Deno was bad and its competitors have performed even worse than it. Cant we conclude this from B ?

Many thanks,
Bhupesh

[RonPurewal]

Hi Ron,

I understand why C is the right choice. But I have a doubt regarding choice B. Why is B out of scope?

Is it not possible that the industry as a whole is performing very badly. Because of the innovative new designs, whatever little market was there was absorbed by Deno, which increased Deno's sales from that particular segment. Maybe overall performance of Deno was bad and its competitors have performed even worse than it. Cant we conclude this from B ?

Many thanks,
Bhupesh

1/
if your supposed "argument" starts with What if...? or isn't it possible that...? or maybe...?
then STOP! it carries no weight! it's not an argument!

in other words, you can't just hypothesize random possibilities and then argue from those possibilities.
if something is clearly the most likely or most reasonable interpretation of some given circumstance, then you can argue from it. but, if you have to start with "maybe" or "isn't it possible", that means you're just coming up with something random and pretending that it's true. not good.

2/
even if this were a valid line of argument, it still wouldn't help to resolve the problem in the passage -- because you are still describing a circumstance leading to an increase in denoma's sales.
in other words, what you're talking about here does nothing to explain the overall decrement in denoma's performance as an entire firm.

what's probably happening here is this: you are still unconsciously assuming the statement in choice (c). in other words, you are forgetting that the ORIGINAL PASSAGE doesn't provide any connection whatsoever between denoma and other firms.
the performance of other firms in the industry is completely and utterly irrelevant, unless you manufacture some sort of connection between denoma and those other firms. choice (c) does manufacture such a connection -- but the original passage, alas, doesn't.

[bbharuka]

if your supposed "argument" starts with What if...? or isn't it possible that...? or maybe...?
then STOP! it carries no weight! it's not an argument!

in other words, you can't just hypothesize random possibilities and then argue from those possibilities.
if something is clearly the most likely or most reasonable interpretation of some given circumstance, then you can argue from it. but, if you have to start with "maybe" or "isn't it possible", that means you're just coming up with something random and pretending that it's true. not good.

Thanks Ron....that is some brilliant advice...for me, to avoid such traps
Just in time before my exam (22nd May) :)

[tim]

glad to hear it, and I hope your test went well..

[bonniewjx]

Is d wrong because it contradicts what stimulus says?

[jnelson0612]

Is d wrong because it contradicts what stimulus says?

Hi Bonnie,
I'm not sure what you mean by "stimulus". Do you mean the argument itself?

[bonniewjx]

Is d wrong because it contradicts what stimulus says?

Hi Bonnie,
I'm not sure what you mean by "stimulus". Do you mean the argument itself?

Yes