#14 - In an effort to boost sales during the summer months

[Administrator]

Please post your questions below!

[lsatfighter]

For this question, I was stuck between A and C, and then I ended up choosing A. For A, I thought, "so what if the whole industry experienced depressed sales, we're only concerned about Foamy Soda. The whole industry is irrelevant to the stimulus. This doesn't resolve the paradox." For C, I thought, "maybe increased production cost results in less cans being produced, which then results in less sales. This resolves the paradox." I can see now that I brought outside information into answer choice C, which was a wrong move.

For A, would the correct thinking have been "Foamy Soda and the soft-drink industry as a whole experienced depressed sales due to some unknown cause like cool weather in the summer or a natural disaster"? For C, would the correct thinking have been "Increased production costs does not mean that less cans were produced. The company could have found a way to pay for the increased production costs while producing the same or more number of cans that it normally does"?

Could you please explain to me why C is the correct answer, and especially why C is better than A?

[Claire Horan]

Hi LSATFighter,

It's helpful to put answer choices into your own words. You don't want to oversimplify, but you do want to understand the general meaning of the answer choice, without allowing the economic jargon to trip you up. So for A, you can understand it to mean that less soda was sold during the summer months. It doesn't matter why, so you don't need to speculate about why, but if it helps you to make sense of it, you can say it was a cold summer or that health drinks became more popular instead. If less soda sold across the whole soda industry, then that explains why less Foamy Soda sold, even though the company tried to boost sales by reducing their prices. (If you're not sure about this explanation, try out the same reasoning in another context. For example, Sam can't get a job despite his efforts. If we found out that not many companies were hiring, wouldn't that help explain why Sam was having such difficulty.)

Now consider answer choice C. We are told that the production costs rose. By itself, that doesn't explain why sales would decrease, unless you add in a premise that because the production costs were high, the company was not able to produce as much soda. Good job identifying that problem with your first attempt at this question!

I have one more tip about problems that discuss demand, supply, and price. Even though the LSAT is supposedly a test that doesn't require much background knowledge, LSAT questions that involve economics are much easier if you have a very basic understanding of the concepts of supply and demand. It wouldn't be a bad idea to spend a few minutes learning how these concepts interact so that, at the very least, you can recognize when you are being tested on them.

Good luck with your studies!

[ericj_williams]

I'm almost certain the test makers wanted you to confuse a reduction in sales with a reduction in profits, which is why some had trouble with C.