Logical Reasoning

PT6 · S3 · Q24 Rumored declines in automobile-industry revenues

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Rumored declines in automobile-industry revenues are exaggerated.

Conclusion

Rumored declines in automobile-industry revenues are exaggerated.

rephrase: auto revenues haven't declined as much as claimed.

Evidence

Sure, auto manufacturers' share of auto industry revenue fell from 65 percent to 50 percent over two years.

But .. over the same period, auto parts suppliers' share rose from 15 to 20 percent, and service companies' share rose from 20 to 30 percent.

Evaluate

This evidence is useless!

The conclusion is talking about whether the overall revenue made by the auto industry has been going down. The auto industry is comprised of lots of different sectors (companies that make cars, companies that make car parts, companies that service cars, etc.)

If you add up all the money each of those sectors makes, you get some big ass number like $20 billion in total revenue. We want to know whether that number has gone down a bunch in recent years.

The evidence is all about market share, which refers to what % of that $20 billion each sector is responsible for.

Market share always adds up to 100%, regardless of whether the total amount of money is $10 billion, $20 billion, $30 billion, etc.

So the evidence about different market shares of different sectors tells us literally nothing about whether the auto industry as a whole is making more / less money than before.

Goal

This is a Relative vs. Absolute issue. The conclusion is about the Absolute size of money made by the auto industry. The evidence is about the how the apportioned shares of that money are shifting.

24.

Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?

The possibility is left open
Bad Objection
We aren't worried about if all the info came from the same source. We have absolutely no use for this info. Market share of different sectors of an industry tells you nothing about whether the industries revenues are growing or shrinking.
11% picked this
Correct
No matter what changes the
Why this is right
This points to the total irrelevance of the evidence. Market share always adds up to 100%, whether the industry is making more money or less money overall.
Skill tested: Flaw · how this choice captures the argument's function is the move to repeat next time.
63% picked this
No explanation is given for
Bad Objection
Knowing why the shares shifted would not rescue the argument. Whatever the reason, the shares would still add to 100 percent and still be silent about total revenue.
11% picked this
Manufacturers and parts companies depend
No Impact
How the sectors depend on each other doesn't matter. Our complaint isn't about needing more info to better understand how these shifting market shares relate to each other. Our complaint is that hearing about market shares tells us absolutely nothing about the overall revenue of an industry.
10% picked this
Revenues are an important factor
Out of Scope
The conclusion is about revenues, not profits. The evidence provides no basis for the conclusion because market share tells you nothing about revenue (not because revenue doesn't tell you everything you need to know in order to assess profit).
6% picked this

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