Logical Reasoning

PT101 · S3 · Q14 In an effort to boost sales during

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In an effort to boost sales during the summer months, which are typically the best for soft-drink sales, Foamy Soda lowered its prices.

Given That

Soda sales are usually highest during the summer months, and Foamy Soda lowered its prices in an effort to boost sales.

How Can it Be That

Foamy Soda's sales dropped during the summer months.

Evaluate / Goal

We need to find four different ways to explain Foam's lower sales numbers.

An answer might say that "lower prices" somehow caused lower sales (a contrast between normal price and lower price.

An answer might use a contrast between what happens for typical sodas (good sales during summer) vs. what happens for Foamy (they're different from other sodas in some worse way).

An answer might use a contrast between typical summers (high soda sales) and this summer (bad soda sales for some reason).

But basically we need to know why this summer isn't like typical summers, Foamy isn't like other sodas, lower-price Foamy isn't like regular priced Foamy, or some other mechanism that can explain why Foamy had disappointing sales this summer.

We can preface our reading of every answer choice by saying,

14.

Each of the following, if true, contributes to reconciling the apparent discrepancy indicated above EXCEPT:

The soft-drink industry as a
Helps Explain
"Foamy had poor sales during the summer months, because .... the whole soft drink industry was struggling during the summer months. So Foamy's attempt to boost sales by lowering prices failed because it's just a bad time for the soda industry in general.
4% picked this
Foamy Soda’s competitors lowered their
Helps Explain
"Foamy had poor sales during the summer months, because .... the other sodas lowered their prices even more. So Foamy's attempt to boost sales by lowering prices failed because it's ended up still being more expensive than the competition's sodas.
4% picked this
Correct
Because of an increase in
Why this is right
"Foamy had poor sales during the summer months, because .... production costs went up?" Rising production costs would only affect profit. It doesn't affect the volume of people buying your product. The only way that escalating production costs would affect sales volume is if the company decided to raise its prices in response to those higher production costs. But we already know that baked-into this Paradox is the idea that Foamy was actually cheaper than usual.
Skill tested: Paradox · how this choice captures the argument's function is the move to repeat next time.
83% picked this
A strike at Foamy Soda’s
Helps Explain
"Foamy had poor sales during the summer months, because .... a lot of stores that usually sell Foamy were out of stock, as a result of a strike at Foamy's main plant." So Foamy's attempt to boost sales by lowering prices failed because they weren't able to get their inventory into all the usual stores, so it was impossible for those stores to sell Foamy at the rates they otherwise would have been.
5% picked this
The weather during the summer
Helps Explain
"Foamy had poor sales during the summer months, because .... it was a weirdly cold summer, and there's less demand for soda when it's cool." But what a summer it was for the hot cider and hot chocolate industries! This, like (A), is explaining the failure of Foamy's price discount plan on a condition that is affecting the soda industry broadly.
4% picked this

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