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GMAT Practice Question (One of Hundreds)
A recent article in one of the nation's leading newspapers noted that despite the government's warning about peanut butter likely being contaminated by salmonella and the government's subsequent recall of a limited amount of peanut butter, 90% of grocery store shoppers surveyed said that they did not plan to change their peanut butter purchasing habits. Nevertheless, roughly two months after the limited recall and one month after the leading newspaper published its article, the country's peanut butter manufacturers reported that same-store sales to grocery store shoppers fell 75% year-over-year.
Which of the following, if true, best explains the apparent paradox above?
Correct Answer: B
The paradox: After a government recall of some peanut butter, shoppers indicated that they would not change their peanut butter purchasing habits. However, same-store-sales of peanut butter subsequently fell dramatically.
Since consumers did not publicly signal any intention to change their behavior, another explanation must exist. Multiple possible explanations exist: the stores voluntarily removed peanut butter, subsequent and more damaging information about peanut butter contamination became public, or consumers responded to the survey in a biased manner (e.g., denying that they will change their purchasing habits so as to appear as if they never fell for purchasing contaminated products).
- This answer heightens the paradox by making the subsequent fall in sales of peanut butter even more unexplainable since a price cut would have stimulated sales (not provided an explanation for their decline).
- This answer identifies a correct explanation for the paradox. With stores fearful about lawsuits, they removed peanut butter and consequently "same-store sales to customers fell."
- Although a tabloid is a much less respected source than a leading newspaper, the fact still remains that the article appeared in a leading newspaper. Further, the source of the news does not explain the discrepancy between individuals' stated intent to continue purchasing peanut butter and the subsequent poor sales figures. If the tabloid as a source were a problem, it would only further increase the paradox over why sales declined (why would consumers seemingly base their decisions upon a tabloid).
- When the individuals took the survey where they stated their intent to continue purchasing peanut butter, they knew about the op-ed piece as it appeared "days before the newspaper conducted its survey." Consequently, the op-ed cannot explain individuals' switch in behavior (i.e., intending to purchase peanut butter but then deciding not to).
- The original argument notes that "the country's peanut butter manufacturers" (i.e., every manufacturer accounted for—not limited to the specific type of peanut butter recalled) reported a drop in sales. Although consumers' intention to change the type of jelly and bread they purchased could imply that consumers would change the type of peanut butter they purchased, it does not explain why sales would virtually stop altogether. There is a difference between changing the type of jelly purchased (and by correlation, the type of peanut butter purchased) and stopping purchasing jelly altogether (and by correlation, stopping purchasing peanut butter altogether).
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