Raw cotton Vs Retail cotton

[poonamchiK]

Unlike the wholesale price of raw wool, the wholesale price of raw cotton has fallen considerably in the last year. Thus, although the retail price of cotton clothing at retail clothing stores has not yet fallen, it will inevitably fall.

Which of the following, if true, most seriously weakens the argument above?

(A) The cost of processing raw cotton for cloth has increased during the last year.

(B) The wholesale price of raw wool is typically higher than that of the same volume of raw cotton.

(C) The operating costs of the average retail clothing store have remained constant during the last year.

(D) Changes in retail prices always lag behind changes in wholesale prices.

(E) The cost of harvesting raw cotton has increased in the last year.

OA : A.

The problem is tht I was stuck between A and E. I dnt know how will we differentiate b/w processing and harvesting cotton (as gng up).
They both essentially look as if each is alone working to contribute to the price of retail cotton go up and not down!

Pls help.
P

[jnelson0612]

To make this argument very basic:
Premise: The price of raw cotton has fallen.
Conclusion: The cost of cotton clothing will fall.

What is the author assuming? That the cost of cotton clothing is ONLY influenced by the price of raw cotton. That seems like a weak assumption, since many other costs could go into the conversion of raw cotton into cotton clothing.

To weaken the argument, attack the assumption that only the cost of raw cotton influences the price of cotton clothing. (A) does this nicely, illustrating that there are other possible factors that go into the final cost of cotton clothing, such as the cost of processing the cotton.

[gmat.acer]

Thanks Jamie for clearing that. But (E) also claims that cost of harvesting raw cotton has gone up and thereby illustrates that there are other factors affecting final price of cotton clothing.
So why is (E) wrong?

[RonPurewal]

Thanks Jamie for clearing that. But (E) also claims that cost of harvesting raw cotton has gone up and thereby illustrates that there are other factors affecting final price of cotton clothing.
So why is (E) wrong?

the harvesting cost is just one component of the wholesale cost. since we already know what is happening with the wholesale cost, any information about an individual component of that cost is irrelevant.

analogy: if i tell you "school tuition is going up", then that means school tuition is going up.
if i also tell you that teacher salaries, which are paid out of school tuition, are decreasing, this fact does not affect the fact that school tuition is increasing.

[gmat.acer]

Ok. that makes it clear now. Thanks Ron.

I believe wholesale price of cotton doesn't involve the cost of processing cotton. Thats why (A) is the correct choice as it says that processing cost went up.

I think earlier I didnt realize its "wholesale price of RAW cotton". I just assumed that the same finished good is going from wholesaler to retailer. But in this case the flow of cotton from harvesting to the finished cotton clothing is I believe as follows:

Harvesting cotton --> wholesale RAW cotton --> processed cotton (& possible other costs too) --> retailer/cotton clothing.

[RonPurewal]

Harvesting cotton --> wholesale RAW cotton --> processed cotton (& possible other costs too) --> retailer/cotton clothing.

yes.

[chetan86]

Hi Ron,

Option E is not targeting the premise?

Premise : The wholesale price of raw cotton has fallen considerably in the last year.

If the cost of harvesting has increased then row cotton price will also increase.

The argument assumes that the price of clothes only depends on the price of raw cotton, and we have to weaken this assumption.

Option E is not weakening the assumption rather targeting the premise, so it wrong?

Do you think my thinking is correct?

[RonPurewal]

If the cost of harvesting has increased then row cotton price will also increase.

Incorrect.
In E, Both of these happened in the same timeframe ("in the last year"). So, the wholesale price of raw cotton went down EVEN THOUGH harvesting became more expensive.

We don't know how that happened. Clearly, some other component of the raw-cotton process must have gotten cheaper, to offset the effect on harvesting.

But... we don't care. Raw cotton is still cheaper, and that's that. Choice E says that one component got more expensive—but, since the overall product is cheaper, we just don't care.

[RonPurewal]

We want to show that finished cotton garments WON'T be cheaper.

Since raw cotton IS cheaper (fact!), this is only possible if some step of the clothing process AFTER the "raw" step is more expensive.

So, A.

[chetan86]

Hi Ron,

Thanks a lot for your explanation and clarifying my doubt. :)

[RonPurewal]

sure.

[Varun KamalN263]

(C) The operating costs of the average retail clothing store have remained constant during the last year.

Can someone explain more on this option? I am not clear with the operating costs?

My understanding of the argument -
Basically, the wholesale price of raw cotton has fallen considerably in the last Year. As per the conclusion, the retail price of cotton clothing at retail clothing stores will inevitably fall.

Now, where does this operating costs comes into picture? I am not able to link that. What will actually happen if the operating costs are constant.. Can someone help in explaining this?

[Sage Pearce-Higgins]

Remember that we're trying to weaken the conclusion. And the conclusion is that 'the retail price of cotton clothing...will fall'. Now, since we know that the raw price of cotton has fallen (the premise), then we're looking for some other reason why the price of cotton clothing won't fall. Since you're the one going to business school, not me, can you think of any relevant factors? You can do a little brainstorming here before looking at the answers. You might think "...well, what other things affect the cost of cotton clothing? What about the cost of production, or the cost of transport, or other overheads for stores?".

Answer C says that some of these things haven't changed. This actually supports the conclusion, and so strengthens, rather than weakens, the argument.