Which of the following, if true, most strengthens the argument for lau

QUESTION

Which of the following, if true, most strengthens the argument for launching a private-label brand?

A) The stores enjoy high visibility and attract foot traffic well.
B) The economy has started to improve, and consumer spending is increasing.
C) Customers at Jenny’s Store are likely to become more price-conscious over the next few years.
D) Most customers visiting Jenny’s Stores are loyal to existing national brands.
E) The company enjoys good relations with the suppliers and manufacturers of the brands that it sells in its stores.

ANSWER

Answer: C
Explanation: C) Launching a private-label brand can improve profit margins, as it can cut out intermediaries. Jenny’s is already having trouble turning a profit, and if Choice C is true and customers demand even lower prices, then Jenny’s will be pushed toward other ways of improving profit margins. This would make the move to private brands more attractive, so Choice C strengthens the argument. Choice A is an advantage for Jenny’s but doesn’t help resolve the issue of private brands. Choice B might weaken the argument by suggesting that Jenny’s can succeed using the old model. Choice D weakens the argument by suggesting that customers are interested in existing brands. Choice E could only weaken the argument by suggesting that relationships with partners in the supply chain are a strength and not a weakness.