GMAT Verbal Reasoning Practice Test 1

Question : 80 of 100

Marks: +1, -0

Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers. Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.
Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.
For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.
For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.
During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.
If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.

Validate

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