Printwell's Ink Jet Division manufactures ink-jet printers and the ink cartridges they use. Sales of its ink-jet printers have increased....
GMAT Critical Reasoning : (CR) Questions
Printwell's Ink Jet Division manufactures ink-jet printers and the ink cartridges they use. Sales of its ink-jet printers have increased. Monthly revenues from those sales, however, have not increased, because competition has forced Printwell to cut the prices of its printers. Unfortunately, Printwell has been unable to bring down the cost of manufacturing a printer. Thus, despite the increase in printer sales, the Ink Jet Division must be contributing less to the company's profits than it used to.
Which of the following, if true, most seriously weakens the argument?
Passage Analysis:
| Text from Passage | Analysis |
| Printwell's Ink Jet Division manufactures ink-jet printers and the ink cartridges they use. |
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| Sales of its ink-jet printers have increased. |
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| Monthly revenues from those sales, however, have not increased, because competition has forced Printwell to cut the prices of its printers. |
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| Unfortunately, Printwell has been unable to bring down the cost of manufacturing a printer. |
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| Thus, despite the increase in printer sales, the Ink Jet Division must be contributing less to the company's profits than it used to. |
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Argument Flow:
The argument starts with background info about Printwell's business, then presents a puzzle (more printer sales but flat revenue), explains why this happened (price competition), adds another complicating factor (unchanged manufacturing costs), and concludes that profits must be down.
Main Conclusion:
The Ink Jet Division is contributing less to company profits than before, despite selling more printers.
Logical Structure:
The author uses a chain of reasoning: more sales + same revenue = lower price per unit, combined with unchanged costs = lower profit margins, which leads to lower total profits for the division.
Prethinking:
Question type:
Weaken - We need to find information that would reduce our belief in the conclusion that the Ink Jet Division is contributing less to company profits than before
Precision of Claims
The argument focuses on printer sales and revenues only, but the division also makes ink cartridges. The conclusion is about total division contribution to profits, not just printer profits
Strategy
Look for ways the division could actually be more profitable overall despite lower printer profits. Since they make both printers and cartridges, we should consider scenarios where increased printer sales lead to much higher cartridge profits that offset the printer losses
This choice reveals a critical gap in the argument's reasoning. The argument concludes that the division is less profitable based solely on printer sales data, but completely ignores cartridge sales. If printers frequently need new cartridges and only Printwell cartridges work in Printwell printers, then selling more printers creates a captive customer base for ongoing cartridge purchases. The increased cartridge revenue from higher printer sales volume could easily offset the reduced printer margins, making the division more profitable overall. This directly weakens the conclusion.
This information about retailer costs doesn't affect the division's profitability. Whether costs go to retailers or not, the division still receives the same revenue from printer sales, and the argument already accounts for the fact that printer revenues haven't increased despite higher sales volumes. The division's manufacturing costs and profit margins remain unchanged by this information.
Knowing that other manufacturers cut prices even more than Printwell doesn't help the division's profitability. If anything, this suggests Printwell might be in a relatively better position than competitors, but it doesn't change the fact that Printwell's own profit margins on printers have decreased due to price cuts.
Having the greatest increase in unit sales compared to competitors is positive news but doesn't address the profitability issue. The argument already acknowledges that unit sales increased - the problem is that revenues stayed flat due to price cuts while costs remained the same, reducing profit margins.
Selling more ink-jet printers than other types of Printwell printers doesn't resolve the profitability concern. This is just a relative comparison within Printwell's product lines and doesn't address whether the Ink Jet Division is contributing less to overall company profits than before.