chungyesol
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Q24 - Rumored declines in automobile-industry revenues are e

by chungyesol Sun May 13, 2012 10:17 pm

I put (A) for an answer after I eliminated all the other answer choices, but (B) is the right answer, and I don't understand why. (B) says the total of all shares of the automobile industry must be 100 percent, and 65%+15%+20%= 100% (two years ago), as well as 50%+20%+30%=100%, which makes (B) not an indication why the statistics given provides no evidence.
Or am I missing something here?

Help please!
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ohthatpatrick
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Re: Q24 - Rumored declines in automobile-industry revenues are e

by ohthatpatrick Mon May 14, 2012 2:01 pm

You're knocking on the door of why (B) is the answer.

This question stem is a weird one. It's asking "why is the evidence totally useless/irrelevant when it comes to the conclusion?"

The conclusion:
Automobile-industry revenues are not declining as much as people have said.

Why?
As you wrote, 2 yrs. ago we had a 65/15/20 breakdown of manufacturers/suppliers/service companies. Nowadays, we have a 50/20/30 breakdown.

Here the question: did the auto industry make more money (revenue) 2 yrs. ago or this year?

We have no idea.

The 65/15/20 and 50/20/30 ideas only tell us how the pie was divided. We want to know how big a pie it was.

The 1st sentence of the stimulus is claiming that auto-industry revenue is down this year. What (B) is saying is that the whole discussion of how that revenue is divided (whether it be 65/15/20 or 50/20/30) is totally irrelevant to the claim of whether the revenue is currently in decline.

Say I told you that last year, Sam and Bob split their company's revenue 50/50, while Dave, Ellen, and Marsha split their company's revenue 33/33/34. Which company made more money?

Who knows? Telling me how the money was split up tells me nothing about the total.

Hope this helps.

=== other answers ===

A) I find it hard to understand how the manufacturers' share is not part of the same statistic as the other two sectors' share (since this whole statistic is how the overall auto-industry's revenue was allocated to these three sectors). But this also doesn't address the gap between what the premise is discussing and what the conclusion is about (the actual gain or loss in total revenue).

C) We're not missing info on why the shares changed. We're missing info on whether the total revenue of the auto industry is up or down.

D) Discussing the interrelation of these three sectors of the auto industry has nothing to do with our missing info: is the total revenue for the auto industry up or down?

E) The conclusion was only about revenue, not profits.