Hi Geva,Geva@EconomistGMAT wrote:The answer should be B, but there are some nice trap answer choices here.Ankittalwar wrote:Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.
The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?
A. Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.
B. The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.
C. Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.
D. Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions.
E. Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.
The argument presents a course of action (hire a small staff, leave the rest to volunteers) and claims that this model works - the volunteers do the work of hired employees, and profits increase as salary expenses are kept low. The conclusion is that internet companies should adopt the model.
B presents a prerequisite without which the model falls apart. If the amount of administrative work to be performed in an internet company is NOT small enough to be completed by a small task-force of full time employees, then the "hire fewer employees" model does not work - there is admin work that is required for the operation of the company, but does not get done.
A is a nice trap that compares internet companies to tradidional companies. Negating A does nothing towards weakening the conclusion that the model works - even if internet companies are not more suited to this model that traditional companies, we don't know whether that is good or bad, since the argument does not tell us anything about traditional companies.
C is completely irrelevant. It's not a necessary assumption - I don't NEED to assume that the full timers and volunteers have different access in order to reach the conclusion that the model works. This is true in real life, but for security,Intellectual property issues that have nothing to do with the argument as presented.
D A prediction for the future, not a necessary assumption.
E The keyword that makes this irrelevant is "increase". The argument tells us that the companies become more profitable because of reduced expenses, not because of increased revenues. In other words, from the argument we can understand that even if the revenue per working hour remains the same and does not increase, the business model still increases profits because a smaller percentage of the same revenue is given towards salaries (i.e. lower cost, not increased revenues).
I still did think E is the better option because the Conclusion claims that this model (fewer full time staffs and more volunteers) should be adopted based on the premise that the profits increase as small % of revenue move to salaries (cost). It means that cost increased a little bit here and for the profit to be increased, the revenue has to be increase too.
On the other hand, B seems not to affect the conclusion because if the administrative work can not be done by fewer full-time employees, the volunteer can help to finish the job. I think B is strengthen rather than an assumption.
