LSAT 135 – Section 2 – Question 22

LSAT 135 - Section 2 - Question 22

December 2011

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Question
QuickView		 Type Tags Answer
Choices		 Curve Question
Difficulty		 Psg/Game/S
Difficulty		 Explanation
PT135 S2 Q22
+LR
+Exp
Resolve reconcile or explain +RRE
Causal Reasoning +CausR
A
14%
160
B
1%
150
C
17%
160
D
8%
157
E
61%
165
146
158
169
 +Harder 146.729 +SubsectionMedium

Most economists believe that reducing the price of any product generally stimulates demand for it. However, most wine merchants have found that reducing the price of domestic wines to make them more competitive with imported wines with which they were previously comparably priced is frequently followed by an increase in sales of those imported wines.

"Surprising" Phenomenon
Why does reducing the price of domestic wine increase sales of imported wine?

Objective
Any hypothesis resolving this discrepancy must introduce a different economic effect or state a difference between wine and other products. It must explain why increasing the price of domestic wine increases sales for its competitor, imported wine—which is apparently contrary to general economic principle.

A
Economists’ studies of the prices of grocery items and their rates of sales rarely cover alcoholic beverages.
Economists believe that reducing the price of “any product” stimulates demand for it, not just grocery items. The author does not imply that demand for domestic wine is expected to increase because wine is considered a grocery item.
B
Few merchants of any kind have detailed knowledge of economic theories about the relationship between item prices and sales rates.
This refers to the knowledge of merchants, not economists. The author does not imply that merchants must be expecting higher demand in order for lowering prices to have that effect.
C
Consumers are generally willing to forgo purchasing other items they desire in order to purchase a superior wine.
This does not state that consumers perceive wines sold at higher prices to be superior. Without knowing whether consumers see imported or domestic wines as superior, this fails to explain the increased demand for imported wine.
D
Imported wines in all price ranges are comparable in quality to domestic wines that cost less.
This deepens the mystery. If imported wines are more expensive than domestic wines but of similar quality, then why did demand for them increase?
E
An increase in the demand for a consumer product is compatible with an increase in demand for a competing product.
This explains why the economic principle is not violated. Lower domestic wine prices caused demand for both types of wine to increase. This is consistent because the author never stated that demand for domestic wine decreased.

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LSAT PrepTest 135 Explanations

Section 1 - Logical Reasoning

Section 2 - Logical Reasoning

Section 3 - Reading Comprehension

Section 4 - Logical Reasoning

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