Logical Reasoning

PT10 · S4 · Q9 There is relatively little room

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There is relatively little room for growth in the overall carpet market, which is tied to the size of the population.

Conclusion (thus)

Carpet companies will be able to gain market share in the carpet market only through purchasing competitors and not through more aggressive marketing.

Evidence

There is little room for growth in the overall carpet market, which corresponds to the population size.

Most people purchase carpet only once or twice in their lifetime, typically during their twenties or thirties, and potentially again in their fifties or sixties.

Evaluate

This argument revolves around the assumption that the carpet market is stagnant due to the limited purchasing cycles of consumers. The author believes that as the population ages, companies can't attract new buyers through marketing due to the stagnant demand trend. Instead, they need to purchase competitors to increase their market share.

To undermine the conclusion, we should find evidence suggesting that carpet companies can indeed increase their market share through means other than acquisitions, such as making existing consumers buy more frequently or expanding demand within the existing market scope.

Goal

Let's look for an answer that shows a potential way for increasing market share by winning over customers from other companies (or by winning over new customers who weren't previously in the market), rather than by purchasing competitors.

9.

Which one of the following, if true, casts the most doubt on the conclusion above?

  1. Most of the major carpet

    No Impact

    The fact that major carpet producers also market other floor coverings is irrelevant to the conclusion about how to gain market share in the carpet market itself. The conclusion focuses on gaining market share specifically in carpets.

    7% picked this

  2. Most established carpet producers market

    Opposite Impact

    This helps the author argue that there's no way to increase market share by coming up with a new brand that serves an underserved niche.

    3% picked this

  3. Two of the three mergers

    No Impact

    The conclusion is about market share, not profit or revenue. And the author wasn't saying that companies SHOULD merge, so it doesn't hurt their argument to say that some mergers have gone poorly. This conclusion is purely about whether more aggressive marketing COULD help gain market share.

    35% picked this

  4. Correct

    Price reductions, achieved by cost-cutting

    Why this is right

    This answer indicates that price reductions from dominant firms are making it hard for other producers to compete, causing them to leave the market. This shifts market share to those successful in cost-cutting and price reduction without the need for acquiring competitors, thereby casting doubt on the conclusion. Any time one company leaves a market, the remaining companies usually increase their market share because customers of that old company become new customers of the remaining companies. (i.e. if 7Sage has 20% of the LSAT student market and then were to collapse, then remaining companies like LSAT Lab and LSAT Demon would likely see their market shares increase as former 7sage customers would become customers of Lab / Demon)

    Skill tested: Weaken · how this choice captures the argument's function is the move to repeat next time.

    53% picked this

  5. The carpet market is unlike

    Opposite (if anything)

    The resistance to new patterns and styles suggests that customers may not be swayed by marketing focusing on new designs, so if anything this helps the author argue that new marketing schemes aren't going to win over customers and thereby increase market share.

    2% picked this

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