Q22 - Most economists believe that

[ManhattanPrepLSAT1]

The two statements we need to reconcile are:

1. Most economists believe reducing the price for a product increases the demand for the product.
2. Most wine merchants have found reducing the price of domestic wine leads to an increase in the demand for imported wine.

For Explain a Result questions, we need to accept everything in the stimulus as true. And this question is asking us what most helps reconcile the two statements, so we need something that helps explain how they can both be true at the same time.

(A) Calls into question one statement (the economists' belief), rather than helping to reconcile the two statements. Eliminate.
(B) Same thing, except it's calling into question the merchants' observations. Eliminate.
(C) Might be a good explanation for why people buy expensive wines in general, but doesn't help explain why decreasing the price of domestic wine increases demand for imported wine. Eliminate.
(D) Might help explain why people buy imported wine in general, but doesn't help explain why the price decrease for domestic wine causes people to buy more imported wine. Eliminate.
(E) This is the answer, as it helps explain how the two statements are compatible: there could be an increase in demand for one product (domestic wine) and a competing product (imported wine) at the same time. For ex, maybe you see domestic wine is on sale, buy some, and also throw in a bottle of imported wine, effectively increasing demand for both.


#officialexplanation

[bradleygirard]

Alright, so I did hit myself in the head when I went back, seeing that I got this question wrong and in the calm of not being in a timed section I could very clearly see why (E) is the right answer, I am trying to understand however why (c) could not be. I know that at the beginning of the test/section they tell you that you should pick the answer that is most correct, but in practice I have never seen a wrong answer that is not demonstrably wrong(my guess, an attempt to remove as much subjective judgement as possible).
The stimulus states that reducing the cost of a product generally increases demand for it. However, wine merchants have found that when they reduce the price of a domestic wine, the imported wine that was previously comparably priced has an increase in sales. As I said, (e) is now pretty obvious to me as a resolution to this apparent paradox, but the more I look at it, the more (c) seems to also work.

(c) states that consumers are generally willing to forgo purchasing other items they desire in order to purchase a superior wine.
This to me reads, though the demand is indeed stimulated for the domestic wine, the customers buy the wine that they think is superior, even if they are tempted by the bargain so-to-speak.

Ah, I think I see. That answer may account for lower than expected sales of the domestic wine, but it doesn't account for the rise in imported wine. Does that sound like a reasonable/good explanation? Tough one either way.

[goriano]

Could you go into more depth regarding why (A) is incorrect? Since the economists' studies rarely cover alcoholic beverages, I could see the economists saying "but wait!" -- the scope of our studies deal with products that aren't alcoholic beverages, so the apparently paradoxical finding (that a decrease in price of domestic wines yields an increase in the sale of imported wines) is actually consistent with our general belief (that reducing the price of a product stimulates demand for it). Help?

[timmydoeslsat]

I almost view A and B like I would in a logic game as interchangeable variables.

Each of these answer choices basically states that the other side is not armed with enough information. We want an answer choice that allows the two paradoxical statements to coexist.

Another thing to realize is that all answer choice A would do is to address the economists point of view of possibly being wrong with regard to demand of alcoholic products, and even that much is a stretch. The stimulus stated that most economists believe this about any product. They are stating "any."

So while this answer may address the economists statements, it does nothing to EXPLAIN the consequences of the imported wine having increased demand when the domestic wine is supposed to.

We have to reconcile the belief and the consequences.

[jamiejames]

Could someone explain a little further why E is correct. I'm having a hard time actually understanding the answer choice itself and how it ties in with resolving the paradox.

[timmydoeslsat]

We are told that most economists believe that lowering the price of any product will bring about increased demand.

That makes sense.

However, most wine merchants state that when they lower the price of a domestic wine, the competing wine (imported) has its demand go up.

If you look closely at the two statements, we are not told that the domestic wine isn't increasing as well.

If the domestic wine is increasing, then that is consistent with what the economists were stating.

The way the stimulus is worded appears to be contradictory due to the fact that a competing wine is having its sales go up. Answer choice E is telling us that the domestic wine can go up while the competing wine does too.

[af10]

A is incorrect because it is out of scope/irrelevant. It says Economists' studies of the prices of grocery items doesn't cover wine. Okay? Who says that this is what they based their conclusion off of? They didn't say prices in general, they said prices of grocery items (and their rates of sales).

[andrewgong01]

I am still confused by this question. I originally chose "E" but during blind review I chose "A".

I rationalized choosing A because it does reconcile the belief with the empirical evidence in that "A" says economists view are based on grocery items excluding wine and the premise says "Generally stimulate" and not "always" ; hence it makes the two competing claims less paradoxical.

I am still not confident in explaining why "E" is correct . "E" to me does not seem to completely solve the paradox either but leaves open the possibility the 'paradox' is possible. Perhaps what confuses me the most is that the paragraph never said anything about if domestic wine sales also increased.


Generally, when in BR where we originally had the correct answer and then the wrong answer, are there any other actions we should take in reviewing the question?

[ohthatpatrick]

Well, the general takeaway would be to go check the forum to make sure you've got the right rationale, going forward, for why one is wrong and the other is acceptable.

(A) does nothing to affect this paradox.

We were trying to reconcile the BELIEF of most economists with the observations of wine merchants.

(A) has nothing to do with the paradox, since it doesn't deal with the belief or the observation.

Economists believe that "lower price stimulates demand" for ANY product.

The fact that their studies of grocery items rarely cover alcohol doesn't mean that their data on alcohol is wrong. It doesn't mean that we shouldn't have applied their belief to this situation. Their belief applies to ANY product.

(E) certainly doesn't leave us fully satisfied, since it only lets us know it's POSSIBLE to reconcile the belief and the consequences.

But this answer still "MOST helps to reconcile". It doesn't say the correct answer will fully reconcile the paradox.

In this case, part of your down to 2 analysis might have needed to include "re-read the question stem".