Near Chicago a newly built hydroponic spinach "factory," a completely controlled environment for growing spinach, produces on 1 acre of...
GMAT Critical Reasoning : (CR) Questions
Near Chicago a newly built hydroponic spinach "factory," a completely controlled environment for growing spinach, produces on 1 acre of floor space what it takes 100 acres of fields to produce. Expenses, especially for electricity, are high, however, and the spinach produced costs about four times as much as washed California field spinach, the spinach commonly sold throughout the United States.
Which of the following, if true, best supports a projection that the spinach-growing facility near Chicago will be profitable?
Passage Analysis:
| Text from Passage | Analysis |
| Near Chicago a newly built hydroponic spinach "factory," a completely controlled environment for growing spinach, produces on 1 acre of floor space what it takes 100 acres of fields to produce. |
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| Expenses, especially for electricity, are high, however, and the spinach produced costs about four times as much as washed California field spinach, the spinach commonly sold throughout the United States. |
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Argument Flow:
The passage presents a balanced picture of the Chicago spinach factory by first showing its major advantage (incredible space efficiency) and then revealing its major disadvantage (much higher costs). This creates a setup where we have competing factors - efficiency vs. cost.
Main Conclusion:
There is no explicit conclusion in this passage. It simply presents facts about the spinach factory's efficiency advantages and cost disadvantages, setting up a scenario for evaluation.
Logical Structure:
This passage doesn't follow a traditional premise-conclusion structure. Instead, it provides contrasting information (pro: space efficiency, con: high costs) that creates a business scenario. The question stem asks us to find what would support profitability, so we need to find something that either reduces the cost disadvantage or creates value that justifies the higher price.
Prethinking:
Question type:
Strengthen - We need to find information that would make us more confident that the Chicago spinach factory will be profitable despite its current cost disadvantages
Precision of Claims
The argument makes specific quantitative claims: 1 acre produces what 100 acres normally produce, and costs are 4x higher than California spinach. We need to respect these exact figures while finding ways profitability could still work
Strategy
Since the factory costs 4x more to produce spinach than California field spinach, we need scenarios that either justify this premium price or reduce the cost disadvantage. We should look for market conditions, cost changes, or value propositions that would make customers willing to pay the higher price or make operations more economical
This suggests operating expenses could be cut by 25%. While this would help reduce costs, we need to think about the math here. Even a 25% reduction in operating expenses wouldn't be enough to overcome the fact that the spinach costs four times as much to produce. The facility would still be significantly more expensive than California spinach, making profitability questionable without addressing the pricing issue.
This states that California field spinach costs can't be reduced further. While this prevents competitors from becoming even cheaper, it doesn't solve the fundamental problem that the Chicago facility's spinach still costs four times more. This doesn't provide any mechanism for the facility to become profitable - it just ensures the cost gap won't get worse.
This is the strongest support for profitability. It explains that the hydroponic spinach is pesticide-free and will sell at exceptionally high prices to premium customers like health food restaurants. This directly addresses the core challenge by providing a value proposition that justifies the higher production costs. If customers are willing to pay premium prices for pesticide-free spinach, the facility could overcome its cost disadvantage and achieve profitability.
This discusses market reach, suggesting the hydroponic spinach isn't limited to the Chicago area. However, having a wider market doesn't address the fundamental pricing problem. Even if we can sell to more customers, we still face the issue that our product costs four times more than the alternative. Market access alone doesn't guarantee profitability when there's such a significant cost disadvantage.
This mentions another facility being built in Canada with cheaper electricity. While this shows the technology might work elsewhere with lower costs, it doesn't tell us anything about whether the Chicago facility specifically will be profitable. In fact, it might suggest that the Chicago location is problematic due to high electricity costs.