Flawed ReasoningDiff: Medium
Logic Breakdown
Passage Summary: A store manager wants to stop selling expensive computers and only sell cheap ones because the cheap ones have a higher percentage of profit, and he thinks they'll sell just as many total computers anyway.
Conclusion: The store should exclusively sell low-end computer models to maximize its total profits.
Reasoning: Low-end models have a higher profit margin (25%) compared to high-end models (13%), and the store would likely sell the same total number of units even if it stopped carrying high-end models.
Analysis: The manager is falling into a classic trap by confusing profit percentages with absolute profit dollars. A 25% profit on a $400 computer is only $100, whereas a 13% profit on a $2,000 computer is $260. Even if the store sells the same number of units, switching to lower-priced items could significantly reduce the actual money in the bank. Look for an answer that points out that a higher percentage of a smaller sum can be less than a lower percentage of a much larger sum.
Conclusion: The store should exclusively sell low-end computer models to maximize its total profits.
Reasoning: Low-end models have a higher profit margin (25%) compared to high-end models (13%), and the store would likely sell the same total number of units even if it stopped carrying high-end models.
Analysis: The manager is falling into a classic trap by confusing profit percentages with absolute profit dollars. A 25% profit on a $400 computer is only $100, whereas a 13% profit on a $2,000 computer is $260. Even if the store sells the same number of units, switching to lower-priced items could significantly reduce the actual money in the bank. Look for an answer that points out that a higher percentage of a smaller sum can be less than a lower percentage of a much larger sum.
Passage Stimulus
Passage Redacted
Unlock Full Passage18.The reasoning in the manager's argument is vulnerable to criticism on which one of the following grounds?
Correct Answer
A
A pinpoints the central oversight: the argument ignores that the dollar profit per high-end sale could exceed that of a low-end sale, so switching to only low-end models might not maximize profits under a capacity constraint.
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