Products that are high performance and full of features generally provide higher profit margins than simpler products.

Products that are high performance and full of features generally provide higher profit margins than simpler products. Because stock market rewards higher returns on research and development and a company’s decisions are driven by stock prices, incumbents in any industry invest their research and development efforts on making products more complex, leaving the products that provide the lowest profit margins to competitors. However, such a strategy often backfires since it allows competitors to build competence and slowly come after those high margin products. Therefore, the best strategy for an incumbent is to invest to maintain leading positions in both low margin and high margin products.

In the argument given, the two boldfaced portions 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 presents 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 cast 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 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 a goal.


OA B

Source: e-GMAT