Explain the apparently surprising result - GPREP1

[RonPurewal]

, so you can depict our reasoning realistically.

i don't deserve the credit for this part-- YOU do.

if i understand what you are thinking, that's mostly because YOU have explained your thought process clearly (regardless of whether that thought process is appropriate for the task!)

You are so considerate. Thank you.

you're welcome.

[michail.palagaschwili]

Here's my thought process for this question. Hope that it helps others and that it's correct for this question type (our experts can better assess it)

Paradox: Revenues from Denoma declined, but according to the retailers, revenues for Denoma products increased.

Goal: Find a reason, why Denoma's revenues declined, while retailers report increasing revenues for Denoma's products ?

A. Because of the need to educate the public about its new models’ capabilities, Denoma’s advertising spending was higher than normal over the period -->

1) We are interested in revenues and not in profits (revenue /=profit), so the increased costs are irrelevant.

2) If Denoma’s advertising spending was higher, then it's more likely that this actions would lead to rising revenues. (Doesn't help at all to resolve the paradox)

B. For the period at issue, Denoma’s major competitors reported declines in revenue that were, in percentage terms, greater than Denoma’s.

This comparison is irrelevant.

C. A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers.

Correct answer as by POE.

D. Unlike some of its major competitors, Denoma has no lines of business outside consumer electronics to provide revenue when retail sales of consumer electronics are weak.

The argument is talking about increased retail revenues, so wrong.

E. During the period, consumer-electronics retailers sold remaining units of Denoma’s superseded models at prices that were deeply discounted from those models’ original prices.

That would have impact on the profits, but we are interested in revenues + this means that retailers have sold all Denoma's products.

[RonPurewal]

i'm sorry, but i don't understand what you're trying to ask. what is your question?

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[RonPurewal]

in any case-- "Correct answer by POE" is not an optimal way to approach this task. you should go into the answer choices with a STANDARD for what a CORRECT answer should do... and look for something that FITS that standard.

in other words, you should be actively looking for a CORRECT answer! just as you'd do in the real world.
in the real world, people don't actively seek out things that AREN'T explanations for things... they seek out "what WOULD explain this?" "what WOULD weaken that argument?" etc. they seek out things that DO stuff.

here:
RETAIL STORES had MORE sales revenue from denoma products.
but... OVERALL, denoma had LESS sales revenue.
so, this is a math problem. there's only one way this could possibly happen.
a correct answer MUST talk about some OTHER kind of revenue for denoma—another kind of revenue that could have shrunk more than the retail revenue went up.

if you go into the choices with this standard, you can VERY clearly and VERY quickly see that all four wrong answers are wrong, and that the correct answer is correct.

POE should ONLY be a backup method.