Critical Reasoning

The First Banking Group’s decision to invest in an electronic network for transferring funds was based on a cost advantage over a non-electronic system of about ten dollars per transaction in using an electronic system. Executives reasoned further that the system would give them an advantage over competitors.

Which of the following, if it is a realistic possibility, most seriously weakens the executives’ projection of an advantage over competitors?

(A) The cost advantage of using the electronic system will not increase sufficiently to match the pace of inflation.

(B) Competitors will for the same reasons install electronic systems, and the resulting overcapacity will lead to mutually damaging price wars.

(C) The electronic system will provide a means for faster transfer of funds, if the First Banking Group wishes to provide faster transfer to its customers.

(D) Large banks from outside the area served by the First Banking Group have recently established branches in that area as competitors to the First Banking Group.

(E) Equipment used in the electronic network for transferring funds will be compatible with equipment used in other such networks.


I do not trust the source of the question, and according to me, the official answer is simply wrong. What do you guys say...[/list]

IMO B

The statement B reminds me what I saw on one of the Zippo lighters.
"Killing for peace is like f**king for virginity"

The statement B is exactly happened to US in World War II. The war was evident and US wanted to stay out of it. But later forcibly pulled into the War.

If the technological advantages are so huge ($10 per transaction), then adoption of technology is inevitable. If the bank does not pitch in now, it will forced to adopt the technology later.

There is another problem with the reasoning mentioned in B. B assumes that banks are not currently engaged in mutually damaging price wars. What if the decision to include the new technology was the result of ongoing mutually damaging price wars.

Furthermore, the executives reasoned the implementation will give them advantage, they did not mention long-term advantages. Even if we assume that B is correct in all respects, it does not weaken the executives' reasoning because it just shortens the length of the advantage and does not turn it into a disadvantage. The correct answer should at least nullify the advantage, if not prove it a disadvantage....

I will go with B, too.

I think B, while not a good answer, is the best answer of the choices.

i think it's B