In Anticipation of the Coming Year, Tecumseh Autos, a National Auto Manufacturer, is Anticipating Sales of its Vehicles.

Question: In anticipation of the coming year, Tecumseh Autos, a national auto manufacturer, is anticipating sales of its vehicles. Tecumseh manufactures compact cars, sedans, minivans, trucks, SUVs, and sports cars. In all categories of vehicles, Tecumseh sets prices so that the profit per vehicle is, on average, about the same. Since the best indicator for sales in each category are the sales last year, Tecumseh’s marketing analysts’ prediction of the three most profitable categories of vehicles in the coming year will be compact cars, minivans, and SUVs respectively.

Tecumseh’s marketing analysts’ prediction relies on which one of the following assumptions?

(A) Across all manufacturers, the most popular cars on the road in America are compact cars, minivans, and SUVs.
(B) The models of Tecumseh’s compact cars to be sold in the upcoming year are identical to or similar to those of last year.
(C) Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs and less than minivans.
(D) The prediction will be refined after an analysis of the sales in the first quarter of this year.
(E) The number of models of compacts cars that Tecumseh produces is greater than the number of models of either minivans or SUVs.

In Anticipation of the Coming Year, Tecumseh Autos, a National Auto Manufacturer, is Anticipating Sales of its Vehicles. – is a GMAT verbal topic of the genre “Critical Reasoning”. This particular GMAT Critical Reasoning topic has been taken from the book ‘Manhattan Prep GMAT Critical reasoning, 6^th Edition’. In this particular topic, candidates need to choose the option that best suits the passage. GMAT critical reasoning tests the logical and analytical skills of the candidates. This topic requires candidates to find the strengths and weaknesses of the argument, or find the logical flaw in the argument. The GMAT CR section contains 10 -13 GMAT critical reasoning questions out of 36 GMAT verbal questions.

Answer: C
Solution and Explanation:

In this GMAT critical reasoning question, we are looking for something that is implied in the argument. This is an assumption is an implied hypothesis. So, we will be looking at the hypothesis and the conclusion which can be drawn.

As per the passage-

Hypothesis: In anticipation of the coming year, Tecumseh Autos, a national auto manufacturer, is anticipating sales of its vehicles.
Hypothesis: Tecumseh manufactures compact cars, sedans, minivans, trucks, SUVs, and sports cars.
Hypothesis: In all categories of vehicles, Tecumseh sets prices so that the profit per vehicle is, on average, about the same.
Hypothesis: Since the best indicator for sales in each category are the sales last year,
Conclusion: Tecumseh’s marketing analysts’ prediction of the three most profitable categories of vehicles in the coming year will be compact cars, minivans, and SUVs respectively.

From the above hypothesis and conclusion, we can conclude that 3 categories would be profitable for coming year. It can be also stated that compact cars, minivans, and SUVs would be same as previous year. 

We can draw assumptions like: 

1) Buyers of these 3 models are comparatively more than for other types
2) Last year sales of these 3 models were more than in other types
3) As profit on average is the same per vehicle, there would be more buyers to make these types most profitable

Now let us check the given assumptions:

(A) Across all manufacturers, the most popular cars on the road in America are compact cars, minivans, and SUVs.
All manufacturers are out of scope. Hence incorrect. 
(B) The models of Tecumseh’s compact cars to be sold in the upcoming year are identical to or similar to those of last year.
In the option it is not mentioned in the given assumption about the model changes would increase or not. Hence incorrect. 
(C) Last year, no other category of Tecumseh’s vehicles generated more profits than SUVs and less than minivans.
This option states that other types of Tecumseh’s vehicles bings more profit in comparison to SUVs. Hence this is the correct answer.
(D) The prediction will be refined after an analysis of the sales in the first quarter of this year.
Option D is Irrelevant.
(E) The number of models of compacts cars that Tecumseh produces is greater than the number of models of either minivans or SUVs.
Option E is not concerned with sales. It is also not concerned about the production data. Hence incorrect. 

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