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Maximize profit

Expert replies
by Dean Jones » Sun Dec 11, 2011 10:09 am
Dear Friends,

I was having problems in answering the following question.

A product that represents a clear technological advance over competing products can generally command a high price. Because technological advances tend to be quickly surpassed and companies want to make large profits while they still can, many companies charge the maximum possible price for
such a product
. But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities. Consequently, the strategy to maximize overall profit from a new product is to charge less than the greatest possible price.

In the argument above, the two portions in boldface play which of the following roles?
A. The first is a consideration that has been raised to argue that a certain strategy is counterproductive; the second presents that strategy.
B. The first is a consideration raised to support the strategy that the argument recommends; the second presents that strategy.
C. The first is a consideration raised to explain the appeal of a certain strategy; the second presents that strategy.
D. The first is an assumption, rejected by the argument, that has been used to justify a course of action; the second presents that course of action.
E. The first is a consideration that has been used to justify pursuing a goal that the argument rejects; the second presents a course of action that has been adopted in pursuit of that goal.


Please help.

OA after some discussions.

Regards
Deano.
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Source: — Critical Reasoning |

by mandarchougule » Fri Dec 16, 2011 3:38 am
IMO E
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by Dean Jones » Sat Dec 17, 2011 11:12 am
OA is option C
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by VivianKerr » Sun Dec 18, 2011 8:34 pm
Conclusion: Maximize profit = charge less than greatest possible

Evidence: Large profits incentivize competitors

Prediction: The first sentence gives evidence as to why companies charge a lot of $$. The second sentence is the main conclusion, which contrasts with the first bold-faced sentence.

We can eliminate A and B since they don't give the correct contrasting relationship. The first bolded part is an explanation, not an assumption so D is out. The answer should be C.

This question's answer choices and bolded parts are slightly different from the Verbal OG guide. Check out David's post of the accurate question:

https://www.beatthegmat.com/og-bold-faced-cr-t83144.html
Vivian Kerr
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