38. Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries (MI) plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.

Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?

a) Although it sells all of the telephones that it produces, Mammoth Industries’ share of all telephone sales has declined over the last year.
b) MI’s average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
c) Advertising has made the brand name of MI’s telephones widely known, but few consumers know that MI owns this brand.
d) MI’s telephone is one of three brands of telephone that have together accounted for the bulk of the last year’s increase in sales.
e) Despite a slight decline in the retail price, sale of MI’s telephones have fallen in the last year

So, to rephrase the question:

Why won’t ‘expanding production’ and ‘continuing its already extensive advertising’ work to capture the increased overall telephone sales.

Only after learning that the correct answer is E, was I able to reason this argument out. How can I think about this from the beginning to arrive/predict E or eliminate the wrong choices?

Thanks in advance.

This question is trying to state a "general" situation - "Sales of telephones have increased dramatically over the last year".
So one way to attack the final statement in the passage is to state that the generalization does not apply to a specific situation - MI's situation.
After you finish hundreds of OG questions, you will find or feel the patterns.
;-)

H, thanks for your answer.
quick question for you -
after exhausting the OG 11 and verbal review (purple) book, would you recommend redoing the CR problems over to examine for the "patterns" you've mentioned above or supplement practice with new CR problems from other sources? that is, given the time to only do one, which do you think is more useful?

Thanks again.

umm...depends...my friend didn't even finish one OG at all, and he got 750+.
If you are the type of person who gets better with more practices, then work on more "new" OG questions. But it is always good to rethink the similarities among questions. Then, you will recognize the "GMAC's logic". It is not good to recognize patterns since patterns can be changed by GMAC easily. But logic cannot. My 2 cents.

i agree with the conclusion of this argument: DO NOT just solve as many problems as you can, from as many sources as you can. you should never forget that VERY few sources offer questions that truly approximate the quality and character of the official problems. in particular, you should be especially skeptical of any source that's offered online for free; you get what you pay for.

when you do problems, make sure that you're getting TAKEAWAYS from those problems. your takeaways should fit into the following template:
"if i see ______ ON ANOTHER PROBLEM, i should ______"
if you can't fill in this sentence in at least one way for a given problem, keep thinking about that problem until you come up with some way to fill it in. this sort of practice - making generalized conclusions - will benefit you much more than will simply blazing through hundreds of problems willy-nilly with little thought paid to the lessons learned from those problems.

what is the wrong with A

(a) is wrong because it doesn't allow us to deduce anything that actually has an effect on the argument.

in fact, (a) doesn't even imply th at mammoth's sales themselves have actually gone down. it says only that mammoth's share - i.e., proportion - of the sales has decreased, but that's not the same as saying that the sales themselves have actually decreased.
for instance, if mammoth's sales have gone up, but competitors' sales have simply increased by a larger factor, then mammoth's share will decrease, even though its sales have actually increased.

in sum, (a) tells us nothing from which we can deduce that mammoth's sales have decreased, much less that they will continue to decrease even with expanded production.

Why E is the correct answer? We do not know anything about the previous year, and from the same reasoning that "Mammoth Industries’ share of all telephone sales has declined over the last year" does not imply anything about increase in sales this year, we can think the same about "Despite a slight decline in the retail price, sale of MI’s telephones have fallen in the last year".
In other words, I reasoned that a "slight decline in the retail price" and "last year" did not "weaken" the argument.
Please, let me know what is wrong with this approach.

Put yourself in this situation.

Last year sales of all telephones shot up, but your telephone sales went down despite your decreased retail price.

This year .. would you -
1. make more telephones or
2. attempt to figure out what is wrong with your product and/or price.

the key is the words "in order to take advantage of this increase". these words show the assumptions that are being made.
in particular, the passage assumes that an overall increase in telephone sales, industry-wide, will automatically translate into an increase in sales for mammoth industries.

choice (e) severs this connection completely - it showed that mammoth's sales dropped as the industry-wide sales increased sharply - and so utterly destroys this assumed connection.

Hi Ron,

Choice E only states that the decline in the sales of mammoth industries last year was due to a decline in retail price and not because of increased sales.Unless we assume that lower retail price translates to an increased sales and that the sales of other companies increased last year.How does this destroy the connection between increased sales in the market this year to increased sales for Mammoth.
Apologies still confused.

Thanks and Regards,
nuggins16

i'm sorry, but i don't understand what you're saying; try re-reading my explanation above (or perhaps writing your post again in another way).
in any case, there is definitely a severe misunderstanding here; choice (e) states that mammoth's sales decreased despite the fact that it lowered its prices. (you stated that choice (e) "states that the decline in the sales of mammoth industries last year was due to a decline in retail price". this is clearly not true; if prices go down, then that change is obviously not going to cause fewer items to be sold.)

Hi Ron,

Can D be not looked this way:

Mammoth industries have contributed the most it can in the increase of sales last year by being one of the top sellers . Therefore, this year increasing the production will not help because Mammoth industries intends to take the advantage of the increase that it has already taken last year.

Plz help...

i highlighted the problematic area in red. just because mammoth has experienced an increase in sales, you're assuming it can't experience a further increase?
not a valid assumption -- for instance, apple has led the increase in smartphone sales for quite a few years now, but that doesn't mean that apple will not sell even more smartphones next year.

I agree on above explanation but question stem stated strongly that M Industries cannot increase sales. Based on on option E, I can say that it cast doubt and hence it creates confusion while selecting E.

Whatever mentions in this problem, past trends may likely to occurs in future but one cannot say it must be occur.

However, I am not questioning this official problem.