GMAT Verbal Reasoning Practice Test 1

Question : 32 of 100

Marks: +1, -0

Morning Glory, the coffee shop on the corner, has lost nearly 50% of its business because a national retail coffee chain opened up a store down the street. Instead of closing up shop, the owner of Morning.
Glory plans to draw in customers by offering coffee, tea, and pastries at much lower prices than the national coffee chain.
The owner’s plan of action is based on all of the following assumptions EXCEPT

some customers will choose the coffee shop that offers the lowest price.
the quality of Morning Glory’s coffee is comparable to that of the national coffee chain.
Morning Glory can afford to cut its profit margin in order to lower prices.
Morning Glory’s customers are very loyal.
the national coffee chain will not lower its prices in order to compete with Morning Glory.

Validate

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