In anticipation of the coming year, Tecumseh Autos, a national auto manufacturer, is anticipating sales of its vehicles. Tecumseh manufactures compact cars, sedans, minivans, trucks, SUVs, and sports cars. In all categories of vehicles, Tecumseh sets prices so that the profit per vehicle is, on average, about the same. Since the best indicator for sales in each category are the sales last year, Tecumseh’s marketing analysts’ prediction of the three most profitable categories of vehicles in the coming year will be compact cars, minivans, and SUVs respectively.
Tecumseh’s marketing analysts’ prediction relies on which one of the following assumptions?
In anticipation of the coming year, Tecumseh Autos, a national auto manufacturer, is anticipating sales of its vehicles. Tecumseh manufactures compact cars, sedans, minivans, trucks, SUVs, and sports cars. In all categories of vehicles, Tecumseh sets prices so that the profit per vehicle is, on average, about the same. Since the best indicator for sales in each category are the sales last year, Tecumseh’s marketing analysts’ prediction of the three most profitable categories of vehicles in the coming year will be compact cars, minivans, and SUVs respectively.
Tecumseh’s marketing analysts’ prediction relies on which one of the following assumptions?
The correct option is C Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs and less than minivans.
The credited answer is (C). Tecumseh predicts the best-selling vehicle categories this year will be, in order, (1) compact cars, (2) minivans, and (3) SUVs. Since they used last year’s sale to make these prediction, those three categories must have been first, second, and third in last year’s sale. Sales are probably based on total revenue, but because every model of car generates approximately the same amount of profit, the order in sales would be the same as the order in profit. Thus, last year, compact cars generated the most profit, minivans the second most, and SUVs the third most. Thus, no other car had profits between minivans and SUVs.
The scope of (A) is too wide. The most popular cars on the road would include many makes, not just cars from Tecumseh. What is true for other manufacturers may or may not be true for Tecumseh. This choice is incorrect.
Choice (B) is not necessarily true. It could be true that some models were radically enhanced or changed. We don’t know how this year’s sales actually will proceed. All we know is Tecumseh’s prediction, and for Tecumseh to have made this particular prediction, we need not know anything about continuity or change in any model. This choice is incorrect.
Choice (D) might be a good idea, but this would be well after the fact, well after the prediction. In this argument, we are not as interested in whether the prediction will be true: we are simply interested in how the marketing analysts arrived at this particular prediction. What they do afterwards might be great, but it doesn’t play into the logic of how they made the prediction. This choice is incorrect.
Choice (E) is not precise. The total number of compact cars that Tecumseh sold last year must be greater than the total number of minivans, but we have no information about how many models Tecumseh has in each category. Suppose they had one one model of compact car, and sold a thousand of them, and suppose they had twelve models of minivans and sold ten of each. They would have sold many more compact cars, and have generated much more in profits in that category, despite the fact that they have only one model. This choice is incorrect.
The credited answer is (C). Tecumseh predicts the best-selling vehicle categories this year will be, in order, (1) compact cars, (2) minivans, and (3) SUVs. Since they used last year’s sale to make these prediction, those three categories must have been first, second, and third in last year’s sale. Sales are probably based on total revenue, but because every model of car generates approximately the same amount of profit, the order in sales would be the same as the order in profit. Thus, last year, compact cars generated the most profit, minivans the second most, and SUVs the third most. Thus, no other car had profits between minivans and SUVs.
The scope of (A) is too wide. The most popular cars on the road would include many makes, not just cars from Tecumseh. What is true for other manufacturers may or may not be true for Tecumseh. This choice is incorrect.
Choice (B) is not necessarily true. It could be true that some models were radically enhanced or changed. We don’t know how this year’s sales actually will proceed. All we know is Tecumseh’s prediction, and for Tecumseh to have made this particular prediction, we need not know anything about continuity or change in any model. This choice is incorrect.
Choice (D) might be a good idea, but this would be well after the fact, well after the prediction. In this argument, we are not as interested in whether the prediction will be true: we are simply interested in how the marketing analysts arrived at this particular prediction. What they do afterwards might be great, but it doesn’t play into the logic of how they made the prediction. This choice is incorrect.
Choice (E) is not precise. The total number of compact cars that Tecumseh sold last year must be greater than the total number of minivans, but we have no information about how many models Tecumseh has in each category. Suppose they had one one model of compact car, and sold a thousand of them, and suppose they had twelve models of minivans and sold ten of each. They would have sold many more compact cars, and have generated much more in profits in that category, despite the fact that they have only one model. This choice is incorrect.
