Question

Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries 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) Mammoth Industries' average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
(C) Advertising has made the brand name of Mammoth Industries' telephones widely known, but few consumers know that Mammoth Industries owns this brand.
(D) Mammoth Industries' 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, sales of Mammoth Industries' telephones have fallen in the last year.

Answer 1

Answer: Option (E) is correct

Explanation:

Even though with a slight decrease in the retail price, sales of Mammoth Industries' telephones fell previously, if this is true then it provides most valid encouragement for view that this particular Industries cannot increase sales of phones by embracing outlined plan given in the comprehension.

If prices fell, then production of more telephones will imbues the market, therefore accelerating decrease in prices. Here rest of the industries in the market did well, yet Mammoth telephones did performed unsatisfactorily. This states that, an individual can't analyse market trends based on Mammoth's telephones sales. The industries in the market may continue to do well, but this does not signifies that they will be able to take leverage of a rising market.