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In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.
Which of the following is required for the above argument to hold?
- a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.
- b)The average sales for each new client are at least equal to the average sales for each other client.
- c)Most of the clients lost were already planning to terminate their relationship with the company.
- d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.
- e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.
Correct answer is option 'E'. Can you explain this answer?
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In the last year, a company has lost a few clients and gained a few. B...
In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.
Which of the following is required for the above argument to hold?
Argument Analysis
Pre-Thinking
Conclusion Clarification
N/A
Pre-Thinking Approach
To pre-think assumptions, let’s see how we can falsify the conclusion. The way to falsify the conclusion will be to identify reasons to show that it is not likely that the average sales per client have been increasing steadily. To do so, we will look at the logical structure, focusing on linkage 1.
Linkage#1
- Falsifying condition – A reason which shows that higher average sales for each new client (vis-à-vis other clients) do not translate in to an overall steady increase in the total average sales of the company..
- Instance 1: Average sales per other clients (old clients who were not lost in the period) have been decreasing steadily.
- Assumption 1: Average sales per ‘other’ clients have not fallen significantly during the period.
- Instance 2: Average sales per client added during the period was $500 while average sales per lost client was $2000.
- Assumption 2: Average sales per client added during the period was not significantly lower than average sales per lost client.
- Instance 1: Average sales per other clients (old clients who were not lost in the period) have been decreasing steadily.
With this understanding in mind, let's take a look at the option statements.
Answer Choices
A
Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.
Incorrect - Irrelevant
The conclusion is only based on a comparison (between the sales per client and number of clients) at the beginning and at the end of the period and we do not know when the “company lost some of its clients”.
B
The average sales for each new client are at least equal to the average sales for each other client.
Incorrect - No new information
The passage already states that the average sales per new client is more than average sales of other clients.
C
Most of the clients lost were already planning to terminate their relationship with the company.
Incorrect - Irrelevant
The conclusion is based on the analysis of certain statistics - number of clients lost / added and the average sales per client newly gained or existing. The precise reason behind the exits, for instance whether the client exits were pre-planned or not, is not relevant in arriving at the conclusion.
D
There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.
Incorrect - Irrelevant
Similar to option C, the option talks about something (quality) which is not a concern of the argument. As stated in the explanation for choice C, the conclusion is based on the analysis of certain mentioned statistics
E
The average sales per client lost were not significantly higher than the average sales for each of the other clients.
Correct
This choice is written along the lines of our pre-thinking per Assumption #2.
Most Upvoted Answer
In the last year, a company has lost a few clients and gained a few. B...
Understanding the Argument
The argument states that the company has lost fewer clients than it has gained, and that the new clients spend more on average than the existing clients. Thus, it concludes that the average sales per client are likely increasing.
Key Points of the Argument
- Client Gain vs. Loss: The company gained more clients than it lost.
- Higher Sales from New Clients: New clients contribute more in sales compared to existing clients.
- Conclusion: Average sales per client are increasing.
Importance of Option E
The correct answer, option E, is crucial because it addresses the sales comparison between lost clients and existing clients. Here's why it matters:
- Sales Comparison: If the average sales per client lost were significantly higher than the average sales from other clients, the overall average sales could still decrease, despite gaining new clients with higher sales.
- Maintaining Average Sales: By stating that the average sales per client lost were not significantly higher, it reinforces that the new clients’ higher spending is enough to offset any potential loss from the clients that were let go.
Why Other Options Fall Short
- Option A: While having more total clients is helpful, it doesn't guarantee an increase in average sales.
- Option B: If new clients' sales were equal to existing clients, the argument wouldn’t necessarily hold.
- Option C: Knowing that lost clients were planning to leave does not affect sales comparisons.
- Option D: Quality of service is important but does not directly impact the average sales calculation.
Conclusion
In summary, option E is essential for supporting the argument that the company's average sales per client are increasing. It ensures that the new clients' higher sales are indeed outweighing any losses from previous clients.
The argument states that the company has lost fewer clients than it has gained, and that the new clients spend more on average than the existing clients. Thus, it concludes that the average sales per client are likely increasing.
Key Points of the Argument
- Client Gain vs. Loss: The company gained more clients than it lost.
- Higher Sales from New Clients: New clients contribute more in sales compared to existing clients.
- Conclusion: Average sales per client are increasing.
Importance of Option E
The correct answer, option E, is crucial because it addresses the sales comparison between lost clients and existing clients. Here's why it matters:
- Sales Comparison: If the average sales per client lost were significantly higher than the average sales from other clients, the overall average sales could still decrease, despite gaining new clients with higher sales.
- Maintaining Average Sales: By stating that the average sales per client lost were not significantly higher, it reinforces that the new clients’ higher spending is enough to offset any potential loss from the clients that were let go.
Why Other Options Fall Short
- Option A: While having more total clients is helpful, it doesn't guarantee an increase in average sales.
- Option B: If new clients' sales were equal to existing clients, the argument wouldn’t necessarily hold.
- Option C: Knowing that lost clients were planning to leave does not affect sales comparisons.
- Option D: Quality of service is important but does not directly impact the average sales calculation.
Conclusion
In summary, option E is essential for supporting the argument that the company's average sales per client are increasing. It ensures that the new clients' higher sales are indeed outweighing any losses from previous clients.
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In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.Which of the following is required for the above argument to hold?a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.b)The average sales for each new client are at least equal to the average sales for each other client.c)Most of the clients lost were already planning to terminate their relationship with the company.d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.Correct answer is option 'E'. Can you explain this answer?
Question Description
In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.Which of the following is required for the above argument to hold?a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.b)The average sales for each new client are at least equal to the average sales for each other client.c)Most of the clients lost were already planning to terminate their relationship with the company.d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.Correct answer is option 'E'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.Which of the following is required for the above argument to hold?a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.b)The average sales for each new client are at least equal to the average sales for each other client.c)Most of the clients lost were already planning to terminate their relationship with the company.d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.Correct answer is option 'E'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.Which of the following is required for the above argument to hold?a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.b)The average sales for each new client are at least equal to the average sales for each other client.c)Most of the clients lost were already planning to terminate their relationship with the company.d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.Correct answer is option 'E'. Can you explain this answer?.
In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.Which of the following is required for the above argument to hold?a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.b)The average sales for each new client are at least equal to the average sales for each other client.c)Most of the clients lost were already planning to terminate their relationship with the company.d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.Correct answer is option 'E'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.Which of the following is required for the above argument to hold?a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.b)The average sales for each new client are at least equal to the average sales for each other client.c)Most of the clients lost were already planning to terminate their relationship with the company.d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.Correct answer is option 'E'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily.Which of the following is required for the above argument to hold?a)Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients.b)The average sales for each new client are at least equal to the average sales for each other client.c)Most of the clients lost were already planning to terminate their relationship with the company.d)There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year.e)The average sales per client lost were not significantly higher than the average sales for each of the other clients.Correct answer is option 'E'. Can you explain this answer?.
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