Critical or Logical Reasoning

Solve the question of and select the option from the choices A through D/E. Check your Answer and view the explanation.

Question: 2

The Maxilux car company's design for its new luxury model, the Max 100, included a special design for the tires. That was intended to complement the model's image.
The winning bid for supplying these tires was submitted by Rubco. Analysts concluded that the bid would only just cover Rubco's costs on the tires, but Rubcoexecutives claim that winning the bid will actually make a profit for the company.
Which of the following, if true, most strongly justifies the claim made by Rubco's executives?

In any Maxilux model, the spare tire is exactly the same make and model as the tires that are mounted on the wheels
Rubco holds exclusive contracts to supply Maxilux with the tires for a number ofother models made by Maxilux.
The production facilities for the Max 100and thosefor thetires to be supplied by Rubco are located very near each other.
When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.
When Maxilux awardedthe tire contract to Rubco, the only criterion on which Rubco's bidwas clearly ahead of its competitors' bids was price.

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Correct Answer: D

None

Option(D) is correct
Option A : We have already been told that the bid is expected to barely cover the costs of supplying the tires on the newcars, so the analysts mentioned in the passage have presumably already taken into account that there is a sparetire supplied forthe Max 100.
Option B : If winning the bid led Rubco to win more exclusive contracts with the Maxilux, that might help support the executives' claim. But this statementindicatesonlythat Rubco already has several exclusive contracts to supply Maxilux with tires, not that winning the bid has led to, or will lead to, more such contracts, which is what would be needed. Option C : As in answer choice (A), this is relevantto the costsof supplyingthe tires for the Max 100, but presumably this was taken into account by the analysts when they concluded that the bid would barely cover Rubco's costson the tires. Option D : Correct. This indicates that by winning the bid Rubco has create the way to profit from the contract with Maxilux, specifically, by creating a market for replacement tires. Option E : This is likely oneof the reasons that Rubco's bidonly just covers the Rubco's costs on the tires; it does nothing to justify the executives' claims that the bid will lead to a profit for Rubco. >br> The correct answer is D.

Critical or Logical Reasoning

Question: 2

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Correct Answer: D

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