IMO the provided answer to the 2nd question on the WikiJob Verbal Reasoning Test is not correct. (can be found here: https://www.wikijob.co.uk/aptitude-test/verbal-reasoning-practice)
Statement: “One way companies can restore profitability is to increase prices.”
Here is the text:
“The gas provider Centrica has seen its half-year profits fall by 20% to £992 million. Despite this it has decided to increase its dividend to shareholders to 3.9p per share. The rise in energy prices released before the announcement of Centrica’s profits was designed, said the company, to restore “reasonable profitability”. The chief executive, Sam Laidlaw, said, “We produced a good set of results in tough market conditions… we will continue to concentrate on improving customer service in British Gas…”
This is an interesting statement given the record rise in prices to households. The announcement of profits which are not far off one billion pounds, a day after the announcement of the rise in price and the increase in dividend to shareholders, is likely to provoke angry reaction. Many will question the extent of the market power that Centrica possesses. There will also be those that will question what the phrase ‘reasonable profitability’ means in the context of profits of nearly one billion pounds.”
I think the only section of the text which is relevant to this statement is the following:
"The rise in energy prices released before the announcement of Centrica’s profits was designed, said the company, to restore “reasonable profitability” "
I put the answer as Cannot Tell, because assuming I know nothing about how to increase profitability, I could not say for sure based on the text that increasing prices will restore profitability.
All the text says is the increase in prices was “designed to restore profitability”. Just because something is designed to do something, doesn’t mean it will do it. We aren’t told that profits have increased since the prices were increased, so we can’t say that increasing prices will increase profitability.
Yet WikiJob has the correct answer as “True” !
Can someone help me out here in understanding how that statement can be true on the basis of this text? It really makes no sense to me!