Oil analysts predict that if the price of oil falls by half, the consumer's purchase price for gasoline made from thi...
Julie-VJuly 15, 2019
Answer A
Hi LSAT Max!
I chose answer A because I thought that it gave an alternative cause for the consumer's purchase price for gasoline to fall. If someone could explain why this wasn't the correct approach for this question and how I could avoid it in the future, I would greatly appreciate it. Thank you in advance for the help!
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Oil analysts predict that if the price of oil falls by half, the consumer's purchase price for gasoline made from this oil will also fall by half.
In other words what the author is saying is that the price of crude oil and the price of gasoline are 100% directly correlated, so if the price of oil falls by 50% so does the price of gas. We can think of many reasons why that might not be the case, e.g. there are other costs incorporated into the price of gasoline aside from crude oil, e.g. refining, transportation etc, so let's see if any of the answer choices undermine the author's argument.
(A) is irrelevant because it focuses on the quantity of gasoline sold, we are only interested in the price and how it is correlated to crude oil price;
(B) strengthens the argument. If the price of gas were to fall by less than half, the gross profit margin would expand.
(C) is irrelevant, even if this is true, the effects of the competitive gasoline market are arguably already incorporated in the gasoline pricing
(D) is irrelevant, similar to A it talks about quantity not the price of gasoline
(E) is the correct answer choice. It discusses other costs that contribute to the cost of gasoline and are not significantly correlated with the oil prices.
Let me know if this helps.
Julie-VJuly 17, 2019
thank you for the clarification! I didn't realize that option A mentions quantity and that it doesn't break down our correlation, but now i do
