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[GMAT OG solution] Following several years of declining advertising sales…

In this article, we’ll look at the solution to the 700-level GMAT Official Guide critical reasoning question. We have analyzed the 5 answer choices and arrived at the correct choice through 4 steps:

  1. Understanding the Argument
  2. Vizualization of Argument
  3. Prethinking
  4. Answer Choice Analysis

General Information on the Official Guide CR question

  • Difficulty Level: Hard (85% – Hard)
  • Accuracy: 54% (GC)
  • Most Common Incorrect option choice: 54% (B), ACD-(12-15%)
  • Question Type: Evaluate
  • Source: GMAT prep

Question: Following several years of declining advertising sales…

Following several years of declining advertising sales, the Greenvile Times reorganized its advertising sales force. Before reorganization, the sales force was organized geographically, with some sales representatives concentrating on city-center businesses and others concentrating on different outlying regions. The reorganization attempted to increase the sales representatives’ knowledge of clients’ business by having each sales representative deal with only one type of industry or of retailing. After the reorganization, revenue from advertising sales increased.

In assessing whether the improvement in advertising sales can properly be attributed to the reorganization, it would be most helpful to find out which of the following?

[Refer to the GMAT official guide for options.]

Solution: Following several years of declining advertising sales…

Here comes an evaluation question. We need to find an answer choice that can help us access the conclusion.

The conclusion here is about the reason behind the improvement in GT’s revenue from advertising sales (A led to B).

A correct choice may

  1. talk about an alternative cause behind B, i.e., C could have led to B
  2. question if A can logically lead to B

However, in this question, no choice other than the correct choice B talks about factors that can actually affect this causality.

A. Proportion of the total revenue of GT generated by advertising sales

C. Type of business that accounts for the largest proportion of GT’s advertising sales

D. Any client that pays a fixed amount for advertising per month

E. Type of businesses that are GT’s advertising client

All these factors are irrelevant to the conclusion. Whether these factors exist or not does not affect the conclusion.

For a detailed understanding of how to analyze such factors and how to perform Variance Analysis, please refer to the detailed solution below:

Understanding the argument

  • Following several years of declining advertising sales, the Greenvile Times reorganized its advertising sales force.

The passage states that the advertising sales of the Greenvile Times (GT) was reducing since many years. After many years of this reduction, GT restructured its advertising sales team.

So, probably, GT considered that reorganizing the team can have a positive impact on advertising sales.

  • Before reorganization, the sales force was organized geographically, with some sales representatives concentrating on city-center businesses and others concentrating on different outlying regions.

How was the sales team organized earlier- Earlier, the sales team was formed considering geographical aspects. The categorization of businesses was done based on their location. So there were city-center businesses and those in outlying regions.

Accordingly, sales representatives were assigned.

  • The reorganization attempted to increase the sales representatives’ knowledge of clients’ business by having each sales representative deal with only one type of industry or of retailing.

The reorganization changed the basis of classification. From geographical location, the basis changed to the type of industry or of retailing.

It was considered that if a sales representative dealt with one kind of business, he would have better knowledge of his clients’ business.

So, probably, knowledge of clients’ business is being considered good for advertising sales.

  • After the reorganization, revenue from advertising sales increased.

After this reorganization, the returns from advertising sales increased.

Conclusion- The passage does not specify the conclusion. Hence, let us check the question stem to understand what the conclusion is.

As per the question stem, we need to evaluate whether the improvement in advertising sales can properly be attributed to the reorganization.

In simple words, is the improvement in advertising sales because of the reorganization?

Visualizing the Argument

Conclusion: The improvement in advertising sales can properly be attributed to the reorganization.

Let us visualize this conclusion properly. The conclusion is about causality between the reorganization and the improvement in advertising sales.

Logic: On what basis is this conclusion being made?

The conclusion is being made considering that changing the basis of the structure of the team from geographical to the type of business helped sales representatives have better knowledge of their client business, which in turn helped improve the advertising sales.

Prethinking

We need to evaluate the conclusion.

So let us start by creating the Falsification Question:

In what scenario will it not be possible to properly attribute the improvement in advertising sales to the reorganization.

Given that:

  • The reorganization was done following several years of declining advertising sales.
  • The basis was changed from geographical location to type of business.
  • The revenue from advertising sales increased after the reorganization.

Falsification scenario 1– What if there exists another potential reason that could have led to the increase in advertising sales.

In such a scenario, it will not be correct to attribute the improvement to reorganization alone.

Assumption 1– No other potential reason that could have led to the improvement in advertising sales exist.

Falsification scenario 2-What if changing the basis from geographical location to type of business did not bring any significant changes in the advertising sales force?

In such a scenario, it will not be correct to say that the revenue improved because of the restructuring since even after restructuring, the sales force remained similar to what it was earlier.

Assumption 2– Restructuring brought about a significant change in the advertising sales force.

Answer Choice Analysis

Choice A: What proportion of the total revenue of the Greenvile Times is generated by advertising sales?

Incorrect:

The proportion of total revenue of GT generated by advertising sales is irrelevant since the conclusion is about the reason behind the improvement in revenue from advertising sales.

Whether advertising sales constitute 10% of total GT revenue or 90% of total GT revenue is irrelevant.

Choice B: Has the circulation of the Greenvile Times increased substantially in the last two years?

Correct:

This choice provides another potential reason that could have led to the increased revenue. Let us perform Variance Analysis for this choice.

Scenario 1- Yes- Let’s consider that the circulation of GT increased substantially in the last two years.

In this scenario, the increased circulation may be a good reason behind the increase in revenue since more people are now reading GT, and hence more people may be contributing towards its advertising sales.

Hence, this scenario weakens our belief in the conclusion.

Scenario 2- Now- Let’s consider that the circulation of GT did not increase substantially in the last two years.

In this scenario, our belief in the conclusion is strengthened because this scenario removes a potential cause that could have led to the improvement in revenue.

Hence, this choice passes the Variance Analysis and hence is the correct choice.

Choice C: Among all types of industry and retailing that use the Greenvile Times as an advertising vehicle, which type accounts for the largest proportion of the newspaper’s advertising sales?

Incorrect:

This choice talks about the type of business that accounts for the largest proportion of GT’s advertising sales.

Again, the conclusion is about the reason behind increased revenue from GT’s advertising sales. What kind of business accounts for its largest proportion will not help us evaluate the reason behind the improvement.

For example, let’s say real estate accounts for the largest proportion of GT’s advertising sales.

Does it help us evaluate whether the improvement in advertising sales can properly be attributed to the reorganization? Clearly No.

Hence, this choice is also irrelevant.

Choice D: Do any clients of the sales representatives of the Greenvile Times have a standing order with the Times for a fixed amount of advertising per month?

Incorrect:

This choice is also irrelevant. It is so because the information in this choice cannot be used to support/ oppose the conclusion that the improvement in advertising sales can properly be attributed to the reorganization.

Let us verify the same using Variance Analysis.

Scenario 1- Yes- Some clients of the sales representatives of GT have a standing order with GT for a fixed amount of advertising per month.

This scenario provides a situation in which GT will get a fixed revenue from these clients. But this scenario does not provide any information related to the improvement or reason behind the improvement in GT’s advertising sales.

Scenario 2- No- No clients of the sales representatives of GT have a standing order with GT for a fixed amount of advertising per month.

This scenario provides a situation in which GT will not get a fixed revenue from its clients. This scenario indicates that it was possible for clients to increase their advertisements, but again, this could be due to any reason, not necessarily due to the reorganisation. Hence, this node also does not in any way increase or decrease belief in the conclusion

Hence, choice D does not pass the Variance Analysis and hence is incorrect.

Choice E: Among the advertisers in the Greenvile Times are there more types of retail business or more types of industrial business?

Incorrect:

This choice is about the type of advertisers that GT has. Since the type of advertisers is irrelevant to the conclusion, this choice is irrelevant.

Core Learnings from this question:

  1. Always try to understand the conclusion in simple words.
  2. Be careful with the factors mentioned in various answer choices. The factors should affect the causality in conclusion. There can be close answer choices that talk about factors that seem to be related to the conclusion but are actually irrelevant.

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