OG: A product that represents a clear technological advance over competing products

AbeNeedsAnswers wrote: ↑

Wed May 20, 2020 8:12 pm

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 greatest price the market will bear when they have 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 an assumption that forms the basis for a course of action that the argument criticizes; the second presents the course of action endorsed by the argument.
B. The first is a consideration raised to explain the appeal of a certain strategy; the second is a consideration raised to call into question the wisdom of adopting that strategy.
C. The first is an assumption that has been used to justify a certain strategy; the second is a consideration that is used to case doubt on that assumption.
D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.
E. The first is a consideration raised to show that adopting a certain strategy is unlikely to achieve the intended effect; the second is presented to explain the appeal of that strategy.

B

First, let's note the bold parts of the prompt:

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.

This argument focuses on the pricing strategy for a product representing a clear technological advance. The first boldface statement discusses the common strategy many companies use: charging the greatest price the market will bear. The second boldface statement counters this strategy, suggesting that the better approach for maximizing overall profit is to charge less than the greatest possible price.

So, we're looking for the answer choice that correctly describes the roles of these two statements in the argument.

Let's review the options:

A. The first is an assumption that forms the basis for a course of action that the argument criticizes; the second presents the course of action endorsed by the argument.
This isn't correct. The first boldface statement is not an assumption; it is a strategy that some companies follow, presented as a factual statement.

B. The first is a consideration raised to explain the appeal of a certain strategy; the second is a consideration raised to call into question the wisdom of adopting that strategy.
This is our correct choice. The first boldface statement indeed explains the appeal of charging the highest price the market will bear (making large profits quickly). The second boldface statement then questions the wisdom of this strategy, suggesting a different approach to maximize profit.

C. The first is an assumption that has been used to justify a certain strategy; the second is a consideration that is used to case doubt on that assumption.
Again, the first boldface statement is not an assumption but a factually presented strategy.

D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.
This is incorrect. The argument doesn't endorse the strategy discussed in the first boldface statement. In fact, the second boldface statement opposes it.

E. The first is a consideration raised to show that adopting a certain strategy is unlikely to achieve the intended effect; the second is presented to explain the appeal of that strategy.
This option incorrectly swaps the roles of the boldface statements. The first one describes the appeal of a strategy, while the second calls this strategy into question.

So, the answer is B: The first boldface statement explains the appeal of a certain strategy, and the second calls into question the wisdom of adopting that strategy.