#17 - In order to save money, many consumers redeem coupons

[Administrator]

Complete Question Explanation

Must Be True. The correct answer choice is (B)

This long stimulus contains a set of facts describing the use of coupons by retail stores.

Although many consumers, to save money, redeem coupons distributed by retail stores, they may not be saving as much as they think. This is because, generally speaking, retail stores that distribute and accept store coupons as a way of discounting prices on certain products charge more for their products, on average, than other retail stores charge for the same products, even after lower prices available on coupon-discounted products are factored in. The stores price their items this way because of the great cost involved in producing and distributing coupons. The retail stores do not simply eat this cost, because doing so would reduce their profits. Instead, they pass the cost on to consumers.

The question stem indicates that this is a Must Be True question. An inference permissible from the fact set, which will be our prephrase, is that consumers who redeem coupons distributed by retail stores in order to save money may ultimately fail to save money. This would occur if the consumers also purchase other products at the store, not on sale, that are priced higher there than at other retail stores. Notice this inference is framed only as a possibility, because nothing in the stimulus states the consumers redeeming coupons actually purchase the other, higher-priced items.

Answer choice (A): This answer choice is incorrect because it is not supported by the stimulus. As stated in the prephrase, there is no support in the stimulus for the inference that the coupon shoppers in fact buy the higher-priced items as well. This choice implies that the shoppers who redeem the coupons also purchase the other items at inflated prices, resulting in little if any net savings.

Answer choice (B): This is the correct answer choice, because it is a restatement of the combination of the second, third and fourth sentences. This question provides a great example of not being overly wed to your prephrase. While the prephrase described above was in keeping with the type of inference normally tested, in this case LSAC chose not to test it. You must be prepared to abandon even a strong prephrase if it turns out the correct answer choice has gone in a different direction.

Answer choice (C): The only mention of profits in the stimulus is the motivation for the retail stores that distribute coupons to increase their prices on other items. There is no support for a comparison between the actual profits of those stores that use coupons and those stores that do not.

Answer choice (D): This choice is incorrect because the stimulus did not provide any information regarding the practices of retail stores that do not use coupons.

Answer choice (E): This is an attractive answer choice because it presents at a per-item level the practice referenced in the stimulus of compensating for the expense of using coupons by raising the prices on some items. However, this choice is incorrect because the stimulus does not identify which products the retailers using coupons mark up.

[Kp13]

Hi,

I understand why answer choice B is correct, however, I am not sure I understand exactly what makes answer choice A wrong.

Thank you!

[Nikki Siclunov]

Hi Kp13,

This is a tricky question. The author observes that the price charged for coupon-discounted products is generally higher than the sticker price at retailers who do not offer coupons, even when the coupon is factored in. So, why can't we infer that "many consumers who redeem coupons save little if any money, overall, by doing so"? Because they do save money by redeeming the coupons, by default: the price they pay is lower than the price charged by retailers who use coupons. Yes, consumers don't necessarily save money by purchasing these coupon-discounted products, but the act of redeeming the coupons does save them money, relative to the sticker price on those items.

Hope this helps! Let me know.

[Kp13]

That is very tricky. I get it now. Thanks!!

[Khodi7531]

I'm still unclear on how E can't be correct. I honestly thought this was a MSS not a MBT so I was between B and E. And B seemed incorrect because i'm skeptical on anything that's a direct paraphrase from the stimulus (I know, it's not good)

But I don't think E is wrong because of the reason stated...which was "you don't know what item". So what if you don't? It says the same item, whatever it is, is priced differently at stores that have coupon discounts and ones that don't. So you could assume that one will be priced higher. So how can this not be correct? Cause it even says retail stores "must" pass it on to customers so one way or another the price of the couponed item should be higher.

Only objection I can think of is that wherever you buy these goods...the pricing is brought up by the store. So even if a place has an item that's couponed and the other doesn't...the other can still charge twice hte amount of the same couponed item at another store. Doesn't mean it'll sell but they can do it. Is that the reasoning to get rid of E?

[Adam Tyson]

Let's try an example, khodi, to show you why E isn't necessarily true. Let's say you shop at Super X, and they have Skippy peanut butter on the shelves for $2.99. Super X doesn't do the coupon thing. Mega Mart also has Skippy for $2.99, but they offer you some coupons, including one for $1.00 off on Skippy. Great, you can go to Mega Mart for your peanut butter and you save a buck! The stimulus tells us, though, that Mega Mart is going to jack up their prices on some products to make up for the cost of those coupons. Does that mean they have to raise the price on Skippy? No! It's not about the price of that particular product, but about "their products, on average". Maybe bread goes up by 25 cents, jelly goes up by 15 cents, a box of cereal is 40 cents more, chicken is an extra 5 cents per pound, etc. The product connected to the coupon doesn't have to have an undiscounted price that's higher than what Super X charges, but overall the prices at Mega Mart will be higher. That's what the stimulus tells us, and what answer B is about.

Answer E is saying that the Skippy at Mega Mart has to be more than the $2.99 that Super X charges. That simply doesn't have to happen. In that sense, this answer is about a flaw in the use of numbers and percentages (which in our course materials are covered in Lesson 9), in that an increased average cannot be used to prove an increase in one of the specific members of the set being averaged. Don't fall for that trap!

By the way, this is also sort of why A is wrong. Maybe you will run to Mega Mart just to pick up Skippy, and keep shopping at Super X, with their lower average prices, for everything else!

[sumzsl]

Hi,

I understand that A is incorrect because someone could go into the store and only buy discounted goods and thus save money. But, could A also be wrong because it doesn't specify that it's customers from retail stores? Because we are only talking about those discounted goods from retail stores.

Thanks!

[James Finch]

Hi sumszl,

The uncertainty you described is exactly why (A) isn't a proper inference and can't be a correct MBT answer. We have to know the correct answer to 100% certainty, there's simply no room for doubt. But (A) may or may not be true, as you note. Only (B) is actually known to us, as it basically the information in the second and third sentences, nothing added or changed.

Hope this helps!

[mikewazowski]

I also initially chose (E). Could a reason that it is wrong be because, in addition to it specifying the exact product being discounted, it also doesn't use "general" which is what the text and (B) use?

[Rachael Wilkenfeld]

Exactly Mike.

Our stimulus tells us that in general prices are higher at the coupon giving store than the non-coupon store. But that doesn't tell us anything about any specific goods at either store. It could be the case that coupon giving store has great prices on a very specific product, despite generally having higher prices.

Remember knowing something about average price won't tell you what is true about individual components of the average. We just can't draw any conclusion about answer choice (E).

Hope that helps!
Rachael