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Math Help - Reasoning Question with Strange? Answer

  1. #1
    Junior Member
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    Reasoning Question with Strange? Answer

    Hello everyone,

    I am having trouble with the multiple-choice question below on logical reasoning/argument, since I cannot understand the basis of the given correct answer.

    I have written my thoughts and reasoning after the question. I have also stated the given correct answer, but have changed its font colour to white. Could someone kindly be of assistance?

    Thank you very much!

    scherz0

    ----

    41. Electrical goods retailers often offer 'extended warranties' which guarantee free repairs if the product breaks down during the term of the warranty. Salespeople are keen to persuade customers to buy these warranties because they gain substantial commission from them. Customers may also be tempted to buy them, since they ensure that the purchaser will not be faced with huge repair bills. However, surveys by consumer protection agencies show that the average cost of repairs per customer is less than the average cost of a warranty. Anybody buying electrical goods would therefore be well-advised not to buy an extended warranty, as it represents poor value for money.

    Which one of the following, if true, would weaken the above argument?

    A Salespeople knowingly mislead their customers into purchasing a poor value
    scheme.

    B The average cost of repairs is low because for the majority of electrical
    purchases the actual cost is zero.

    C No extended warranty scheme would be viable for the retailer if the average
    cost of repairs exceeded the cost of the warranty.

    D In most warranty agreements there are clauses which state that certain kinds
    of repair are not covered.

    E With or without an extended warranty, customers have statutory rights which
    retailers are obliged to observe.

    Given correct answer (hidden in white): B

    My thoughts: I ruled out C, D, E. I then picked A because I know that my choice must weaken the argument (ie I want to argue that warranties are GOOD).

    (This paragraph contains spoilers): However, how would the given correct answer weaken the argument? If anything, it seems to support it because if the average cost of repairs is low, and certainly if the actual cost of repairs for electrical appliances is zero, why would buying a warranty on average be shrewd?
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  2. #2
    A Plied Mathematician
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    A is incorrect, because it would strengthen the argument against buying an extended warranty. That is, you already know from the original paragraph that salesmen want to sell extended warranties, because they get more commission. Therefore, the only possible interpretation for the phrase "poor value scheme" is an extended warranty. Taken together, you can infer that if A is true, the salesman is trying to sell you an extended warranty that isn't worth it. That argues against getting the extended warranty.

    C Definitely strengthens the original argument against extended warranties. If the retailer is smart, he's going to price the extended warranty at a point that exceeds the average cost of repairs.

    D This makes the warranty less useful - hence, why would you buy it?

    E Again, this makes not getting the warranty less objectionable, and is thus an argument against getting the warranty.

    Finally, B. I think there's a hidden assumption here: if the majority of people don't get their electronics repaired, you have to ask why. Maybe it's because they can't afford the repairs because they don't have the extended warranty. So this would weaken the argument, because it would put you, the supposed buyer of the extended warranty, in the position of being "above the average", so to speak. Does that make sense?
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  3. #3
    MHF Contributor
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    Is it a question from GRE by chance? Being a logic major, I scored pretty low on analytical section because, even though the questions were interesting, they seemed far too complex to be solved in the allotted time.

    Actually, looking at the Wikipedia page for GRE, I don't see the multiple-choice analytical section anymore. In my days, there was one.

    Finally, B. I think there's a hidden assumption here: if the majority of people don't get their electronics repaired, you have to ask why. Maybe it's because they can't afford the repairs because they don't have the extended warranty.
    I think B may weaken the argument even if for the majority of people the equipment does not break and so no repairs are necessary. B opens a possibility that the average repair cost is low only because non-zero costs are rare; however, when they are non-zero, they may be quite high. It's questionable how the average repair cost for 10,000 people is useful to you if you buy the equipment only once: for you, it either breaks or it does not. It's not like you are minimizing the expenses in the long run.
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