GMAT PREP Tricky cr question...a manufacturer of workstation

[CONFUSED]

A manufacturer of workstations for computer-aided design seeks to increase sales to its most important corporate customers. Its strategy is to publish very low list prices for workstations in order to generate interest among the buyers for those corporations.
Which of the following, if characteristic of the marketplace, would tend to cause the manufacture’s strategy to fail?
A. The proposed list prices would seem low to a typical buyer for the manufacturer’s most important corporate customers.
B. The capabilities of workstations suitable for given jobs are not significantly different among various manufactures.
C. The manufacturer’s most important corporate customers employ as buyers persons who are very knowledgeable about prices for workstations for customer-aided design.
D. customers differ significantly in the percentage of resources they can devote to computer workstations.
E. Buyers for corporations that purchase workstations for computer-aided design receive bonuses for negotiating large discounts from the list price.

ok OA is E

but I think that D is correct too. if customers can't afford to purchase workstations, then it doesn't matter how low the prices are.

please help guys!

[Anon]

E - if prices are already too low , the buyers will not buy from the manufacturer as they will not get a bonus .

OA ?

[Pathik]

D. customers differ significantly in the percentage of resources they can devote to computer workstations.

If anything D strengthens the argument by saying that customers can more value for their resources.

[RonPurewal]

but I think that D is correct too. if customers can't afford to purchase workstations, then it doesn't matter how low the prices are.

i'll assume from your wording ('...is correct too') that you already understand the validity of choice e; if you don't, please post again and we can explain it.

you're reading way too much into choice d, which says only this: the customers differ significantly in how much they can spend on workstations.
you seem to be inferring from this that there are many, many customers who can't afford to purchase workstations at all, an inference that is completely unjustified.
analogy: if an article told you that bidders made 'widely varying bids' for some piece of art at an art auction, would you assume that many bidders made a bid of zero dollars? no, of course you wouldn't.

if anything, as stated in a post above, this choice strengthens the argument somewhat, because it indicates the presence of at least some price-sensitive consumers who would welcome the new plan.

--

as a final shot in the head to the complaint about consumers who can't afford workstations at all:
even if there are zillions of such customers, the argument still isn't weakened at all. here's why: those consumers wouldn't even be in the marketplace in the first place!
think about what it means for the manufacturer's strategy to fail: it means that customers who might otherwise purchase the product decide not to purchase it.
if you know customer X can't, or won't, purchase your product no matter what, and still can't or won't under your new strategy, that is not a failure.

[selva.e]

Hi Ron

why not C?

[RonPurewal]

Hi Ron

why not C?

because it's irrelevant.

if the buyers are "very knowledgeable about prices", we don't have any additional information about whether they'll be attracted by the low list prices.

you can't connect those two ideas without making significant new assumptions. and you're not allowed to make significant new assumptions.

[thanghnvn]

I find that prephrasing/prethinking is effective because doing so confirms that we understand the argument and makes us know what to do with answer choices.

-summarize argument: reduce listed price attrack buyer.
-prethinking: Assumption: no other cause, customer like reduced price. Weakener: another reason make buyer dislike reduced price
-look for similar thing among answer choices: E match perfectly.

choose E.

[RonPurewal]

I find that prephrasing/prethinking is effective because doing so confirms that we understand the argument and makes us know what to do with answer choices.

-summarize argument: reduce listed price attrack buyer.
-prethinking: Assumption: no other cause, customer like reduced price. Weakener: another reason make buyer dislike reduced price
-look for similar thing among answer choices: E match perfectly.

choose E.

perfect.

[NguyenL542]

I remember a question which is about fluoride in toothpaste - new toothpaste, higher fluoride percentage, and the company plans to advertise about it. The answer choice to weaken this plan is that the people have already know about the high fluoride percentage and that the plan will not succeed.

So, in C, can I reason that because buyers have already known the price in very detail, so that the plan of the manufacturer will have no effect?

In E, people will not buy because they have motivation to reduce price.

In the stimulus, the "manufacturer of workstations for computer-aided design seeks to increase"; that means "no effect" or "not buy" is the same at factors to decide which choice is correct for me.

Please correct me! I'm confused now! How to make decision here?

Ron, could you help? Thanks in advance

[RonPurewal]

if people are knowledgeable about price points, then they will recognize LOW prices when they see them.
therefore, if C is true, it serves as strong evidence FOR the plan.

[NguyenL542]

Thanks! I did look up to understand the meaning of "knowledgeable", I understood it wrong at the first place

[RonPurewal]

got it.

out of curiosity, what did you think it meant?

[NguyenL542]

got it.

out of curiosity, what did you think it meant?

As in my previous post, "So, in C, can I reason that because buyers have already known the price in very detail, so that the plan of the manufacturer will have no effect?" => I thought that it means buyers have already known the price. For example: I had your lowest price in my hand, then you issue the same list of price to me, doing so will not affect my decision.

By the way, I took the GMAT on 10-Nov, got 700 Q50 V34, many thanks to MGMAT, especially to Ron

[RonPurewal]

ah, okay, i see what you mean.

the answer choice describes people who are 'knowledgeable about prices' of these things.
this refers to a high degree of general knowledge—but it certainly doesn't mean that they know everything about every manufacturer's/retailer's prices.

by the same token, if my sewing machine is broken, i would want to take it to a repair person who is experienced with sewing machines.
this does not imply that (s)he has any particular level of experience with the specific sewing machine that i own. rather, it just means that (s)he has a good deal of experience with sewing machines in general.

[PuneetG652]

A manufacturer of workstations for computer-aided design seeks to increase sales to its most important corporate customers. Its strategy is to publish very low list prices for workstations in order to generate interest among the buyers for those corporations.
Which of the following, if characteristic of the marketplace, would tend to cause the manufacture’s strategy to fail?
A. The proposed list prices would seem low to a typical buyer for the manufacturer’s most important corporate customers.
B. The capabilities of workstations suitable for given jobs are not significantly different among various manufactures.
C. The manufacturer’s most important corporate customers employ as buyers persons who are very knowledgeable about prices for workstations for customer-aided design.
D. customers differ significantly in the percentage of resources they can devote to computer workstations.
E. Buyers for corporations that purchase workstations for computer-aided design receive bonuses for negotiating large discounts from the list price.

As the manufacturer's aim is to increase the sales, then why is option B incorrect?

Option B says that various manufacturers make similar type of workstations. This means that the target customers are shared among various manufacturers. This decreases the revenue generation for the manufacturer mentioned in the sentence. Hence, characteristics mentioned in option B fails the strategy.

Please explain.


Regards,
Puneet