Critical Reasoning: Inference Questions

The Tulips electronics manufacturer came out with a revamped version of a radio they had once produced. The older model had excellent sound quality. The new version had a more attractive design and was fitted with a display screen. The management department was extremely pleased with the record-high sales figures produced by the new radio although the finance department claimed that the profit earned by the old radio in the same amount of time was higher by two-thirds.

Which of the following inferences is best supported by the statement made above?

Incorrect.

Although it may be concluded that the new product's costs in general may have affected the profit, the cost of the screen specifically is not mentioned in any of the premises. Therefore, we simply do not have enough information to assign the blame for the rising costs specifically to the screen, rather than some other factor, and this conclusion goes too far from the information given.

Incorrect.

This conclusion goes too far from the information given to us. Although it may be concluded that the new model's costs in general may have affected the profit, the cost of marketing the products specifically is not mentioned in any of the premises.

Incorrect.

This conclusion contradicts Premise D. The word revenues indicates the total income created by the product. In this question, the phrase record-high sales figures represents the amount of revenue made by the new product, meaning the new product exceeded all its predecessors.

Incorrect.

This conclusion contradicts Premise D. The phrase record-high sales figures means that none of their older product had ever sold more than the new one.

Very well done!

When the question provides information on two out of the three parameters of revenue\profits\expenses questions (in this case, revenues and profit), this indicates the answer choice should revolve around the third parameter (expenses). In this case, the lower expenses of the older radio account for its higher profits.

The other dangerous answer choices here are A and B, as both of these answer choices also mention expenses. However, both A and B are less preferable as answer choices because they also make assumptions about precisely what those costs were. A says the screen of the new model was more expensive; B says the new model's marketing was more expensive. But the argument, on which the correct answer choice should rely, says nothing as specific as that - and mentions neither screens nor marketing. We simply do not have enough information to reach A or B as the conclusion - all we can really learn from the argument is that the expenses must have risen in general terms.