GMAT Practice Question Set #10 (Question 28-30)

Critical Reasoning Question #29: Smartphone Price Cut  
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A certain mobile smartphone manufacturer aims to increase its market share by deeply discounting its smartphone prices for the next several months. The discounts will cut into profits, but because they will be heavily advertised the manufacturer hopes that they will attract buyers away from rival manufacturers' smartphones. In the longer term, the smartphone manufacturer envisions that customers initially attracted by the discounts may become loyal customers.

In assessing the plan's chances of achieving its aim, it would be most useful to know which of the following?


Whether the smartphone's competitors are likely to respond by offering deep discounts on their own products


Whether the advertisements will be created by the manufacturer's current advertising agency


Whether some of the smartphone manufacturers' models will be more deeply discounted than others


Whether the smartphone manufacturer will be able to cut costs sufficiently to maintain profit margins even when the discounts are in effect


Whether an alternative strategy might enable the smartphone manufacturer to enhance its profitability while holding a constant or diminishing share of the market

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