Logical Reasoning

PT139 · S4 · Q18 Computer store manager: Last year

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Computer store manager: Last year we made an average of 13 percent profit on the high-end computer models—those priced over $1,000—that we sold, while low-end models—those priced below $1,000—typically returned at least 25 percent profit.

Conclusion (should = opinion)

We should sell only low-end models.

Intermediate Conclusion

This would maximize our profits.

Evidence (since)

We have a 25% profit margin on low-end models, but only a 13% profit margin on high-end computer models.

There's a limit to how many models we can display and sell.

And if we only sold low-end, we'd probably sell as many computers as we would if sold both kinds.

Evaluate

How can argue against this plan and say, ?

Arguing it wouldn't maximize profits will take some mathematical thinking.

The author is thinking,

Does that actually get us more profit? Not necessarily. The low-end models have a higher profit margin, but they don't necessarily make more profit in total dollars (this is a Relative vs. Absolute flaw).

Let's say the low-end computers cost $400. A 25% profit is 1/4, or $100.

Let's say the high-end computers cost $1000. A 13% profit is $130.

So every high-end computer we sell gets us $130 in profit, while selling each low-end computer only gets us $100 in profit.

Therefore, the author's math is wrong. We wouldn't maximize profits by selling all low-end. We'd actually make more (100 units) x ($130 profit / unit) if we sold all high-end computers.

Goal

Look for an answer pointing out the Relative vs. Absolute mathematical flaw. The item with the higher profit margin might still make less profit in absolute terms.

Or, the answer might fight the link from Intermediate Conclusion to Main Conclusion and argue that, .

18.

The reasoning in the manager's argument is vulnerable to criticism on which one of the following grounds?

  1. Correct

    The argument fails to consider

    Why this is right

    When a Flaw answer begins with fails to consider / ignores the possibility, we can ask ourselves whether the idea that follows would Weaken. Can we object to the author by saying, "Hey, bud -- we earn significantly more money on each high-end computer than we do on each low-end computer"? Sure! "How is it going to maximize our profits to sell only low-end computers, if we make significantly less money on each low-end computer?!" If we solved the Relative vs. Absolute riddle and realized that a product with a higher profit margin might nonetheless make less profit, then we'll understand why this answer is saying this idea. But even if we didn't work out that mathematical objection when we read the argument, we should still be able to ask ourselves, "Would it weaken this argument to say that each high-end model makes significantly more money than each low-end model? Yes, that seems to go against the author's recommendation!"

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

    77% picked this

  2. The argument fails to address

    Not an Objection

    When a Flaw answer begins with fails to consider / ignores the possibility, we can ask ourselves whether the idea that follows would Weaken. Can we object to the author by saying, "Hey, author -- it's possible that last year the store sold as many high-end models as low-end models"? No, the author doesn't care at all about what the ratio of high-end to low-end sales were last year. She's trying to make a recommendation for the upcoming year, strategizing what ratio would be most profitable.

    7% picked this

  3. The argument ignores the possibility

    Not an Objection

    When a Flaw answer begins with fails to consider / ignores the possibility, we can ask ourselves whether the idea that follows would Weaken. Can we object to the author by saying, "Hey, author -- some people come into the store to buy a low-end one but end up buying a high-end one"? No. In the author's Plan, the store will only stock low-end computers, so there won't be any people who "upgrade" from their intended low-end to a high-end. But the author isn't saddened by a customer who is forced to still buy a low-end, rather than a high-end. The author thinks forcing that customer to buy the low-end maximizes profit for the store (since the profit margin on the low-end computer is 25% but would only be 13% on the high-end model).

    4% picked this

  4. The argument presumes, without providing

    Not Assumed / Too Strong: sole

    When a Flaw answer begins with takes for granted / presumes, we can ask ourselves whether the idea that follows qualifies as Necessary Assumption. Was the author assuming that "the sole objective in managing the computer store is maximizing profits"? No, just because she mentions "maximizing profit" as a reason for following her recommendation, that doesn't commit her to thinking that "maximizing profit is the only objective in managing the store". When someone says "we should do X", they are assuming that the upsides outweigh the downsides. So a correct answer could have said that the author, "presumes, without providing justification, that the manager does not have objectives beyond maximizing profits that would be badly undermined by this plan".

    2% picked this

  5. The argument fails to recognize

    Not an Objection

    When a Flaw answer begins with fails to consider / ignores the possibility, we can ask ourselves whether the idea that follows would Weaken. Can we object to the author by saying, "Hey, author -- the future sales of low-end computers may not be the same as past sales"? No, the author wasn't assuming that they would be the same. In fact, according to her plan, she's assuming that future sales of low-end computers would be higher than before (because she's planning to send more low-end computers, in order to reach the same grand total of computers that would be sold if they offered both low-end and high-end).

    10% picked this

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