Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.

Conclusion: Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above
Reasoning: Sales of phone increased. M. increases phone productions. Still, M.I. cannot increase sales only if: the model is outdated; the phones don't work and are returned;prices dropped,etc.

(A) Although it sells all of the telephones that it produces, Mammoth Industries' share of all telephone sales has declined over the last year. Wrong - shell game. Clearly, the total share of the market <> absolute value of sales. If total share gets bigger + but company sales remain flat, then producing phones will hurt. But, if total share increases + company sales increase very litte, producing more phones could increase sales. This always the trap answer: for absolute value answers, trap is percentage; for percentage answers, the trap is absolute value answers.

(B) Mammoth Industries' average inventory of telephones awaiting shipment to retailers has declined slightly over the last year. Wrong - reverse answer. If times awaiting shipment has decreased, then more phones can be sold. Thus, there can be more sales.

(C) Advertising has made the brand name of Mammoth Industries' telephones widely known, but few consumers know that Mammoth Industries owns this brand. Wrong - if few customers know of brand, then sales can increase.

(D) Mammoth Industries' telephone is one of three brands of telephone that have together accounted for the bulk of the last year's increase in sales. Wrong - If market is increasing, then more sales can occur.

(E) Despite a slight decline in the retail price, sales of Mammoth Industries' telephones have fallen in the last year. Correct - if prices have fallen, then producing more phones will saturate the market, thus accelerating the decline in prices.

IMO E