Logical Reasoning

PT104 · S4 · Q8 People always seem to associate high prices

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People always seem to associate high prices of products with high quality.

Given that ...

We tend to associate higher prices with higher quality products.

How can we explain that ...

The best teas are often the same price as the lower-quality teas?

Evaluate / Goal

We're going to need something specific about tea that allows the good stuff to be cheap or forces the mediocre stuff to still be expensive.

How come, whether it's decent tea or awesome tea, tea pretty much costs the same?

8.

Which one of the following, if true, does most to explain the apparent counterexample described above?

  1. Packing and advertising triple the

    No Impact

    This doesn't help flatten the difference between average and excellent tea. Let's say that for a given amount of tea, it costs 1 dollar for average tea leaves and 2 dollars for excellent tea leaves. The average stuff costs 50% as much. According to this answer, adding in the packing and advertising costs means that the average box of tea will cost $3 and the excellent one will cost $6. It's still the case that the average stuff costs 50% as much. This answer provides no distinction between the good tea and the average tea. We need to know why good tea can be cheaper than expected or why average tea can be pricier than expected.

    11% picked this

  2. Correct

    Most people buy low-quality tea,

    Why this is right

    Suppose that Lipton tea sells mediocre tea, but there is high demand for Lipton, so the retail price for them can be kept high. Meanwhile, suppose that fancy Jade Journeys tea is high-quality, and it's priced high accordingly. But there's Lipton tea next to it on the grocery shelf, priced the same. If people keep reaching for the Lipton instead of the higher quality JJ tea, then Lipton can keep charging the same price as the high-quality tea next to it. In order to like this answer as "an exception" to the general rule, we would want to feel like, "For most products, it isn't the case that most people buy a low-quality version of that product." When it comes to blenders, toasters, ground beef, lawn mowers, etc., it would be unusual for most consumers to buy a low-quality version of that product.

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

    66% picked this

  3. All types of tea are

    No Distinction

    Just like (A), this offers no distinction between the high quality and lower quality teas. If the tea leaves for high quality tea are more expensive to procure than are the tea leaves for average quality tea (we'll say $2 vs. $1 of tea leaf expenses goes into each box), the import tariffs will add another $1 to each of those costs, so now we're at $3 vs. $2. We need this answer to flatten out the price difference between good and weak tea, and this answer introduces something that applies evenly to both.

    7% picked this

  4. Low-quality teas are generally easier

    Deepens the Paradox

    This is sort of built into the common sense understanding of the first sentence. We associate higher prices with higher quality because we know that higher quality usually involves expending more resources on obtaining better ingredients. We assume that higher quality teas come from more scarce tea leaves which will be more expensive to procure, which is why we expect these higher quality teas to be priced higher, in order for the company to make back the money they spent to produce it. We need our answer to bring great and mediocre tea closer in price, and this asymmetric comparison reinforces why they should be different in price.

    8% picked this

  5. The price of tea generally

    No Impact

    This does nothing to tell us why tea is different from other products, in relation to the comparable pricing of great vs. mediocre versions of the product.

    9% picked this

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