Critical Reasoning

Companies are often torn between the benefits of focusing on one major product or service and the drawbacks of relying too heavily on one primary source of income. While narrow focus can provide a company with an advantage over competitors that offer a wider range of products or services, an undiversified income stream can leave a company susceptible to major fluctuations in cash flow. We can see this tension realized when, for example, ________________.

Which of the following best completes the passage below?

(A)a local messenger service known for its speedy deliveries is forced to lay off twenty percent of its work force after a rise in local taxes encourages many local businesses to move out of state

(B)an advertising agency loses one of its clients

(C)a holding company that owns a car rental agency and a national doughnut chain is now interested in purchasing a professional basketball team

(D)a construction company opts to use non-union labor to increase its profits

(E)a specialty sandwich store decides to open franchises throughout the country that will focus on using local ingredients

The actual answer is A.Please explain how to go about trying to answer this question
Thank You!

RB90.

for this particular CR, we can see the main issue raised is focusing on one primary product or service.Option A tells us about a messenger service which laid off its 20% employees. This resulted becoz local business moved out of the locality. This means the messenger service was heavily dependent on local businesses for its profit....
This shows that depending on one service (in this case dependent on local businesses rather than businesses in other locality also) can leave a company susceptible to major fluctuations in cash flow

therefore OA is A

I hope i helped you understand clearly....