GWD5-Q29:
Over the past fiveyears, the price gap between name-brand cereals and less expensive store-brandcereals has become so wide that consumers have been switching increasingly tostore brands despite the name brands’ reputation for better quality. To attract these consumers back, severalmanufacturers of name-brand cereals plan to narrow the price gap between theircereals and store brands to less than what it was five years ago.
Which of thefollowing, if true, most seriously calls into question the likelihood that themanufacturers’ plan will succeed in attracting back a large percentage ofconsumers who have switched to store brands?
A. There is no significant difference amongmanufacturers of name-brand cereals in the prices they charge for theirproducts.
B. Consumers who have switched to store-brandcereals have generally been satisfied with the quality of those cereals.
C. Many consumers would never think of switchingto store-brand cereals because they believe the name brand cereals to be ofbetter quality.
D. Because of lower advertising costs, storesare able to offer their own brands of cereals at significantly lower pricesthan those charged for name-brand cereals.
E. Total annual sales of cereals—including bothname-brand and store-brand cereals—have not increased significantly over thepast five years.
