competitive market

[Ankitaverma]

If new working practices raise a firm's productivity, will the firm respond by paying its workers more? Not in a competitive market. In such a market the firm, to gain a competitive edge, will reduce prices. The workers' real wages, as measured by those wages' purchasing power, will still rise because of lower prices.
In a competitive market which of the following, if true, ensures that the workers of a firm that achieved productivity gains will derive from these gains the benefit of higher real wages?

(A) The workers' firm continues to achieve productivity gains.
(B) Other firms do not achieve comparable productivity gains.
(C) The workers buy products made by the firm that employs them.
(D) The workers prefer the new working practices over the old.
(E) The firm pays its workers at or above the industry's average.

Q/A-C why not A

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Hi Ankitaverma,

This CR prompt asks us to Strengthen the logic in the paragraph. Note that we're trying to support the idea that the workers of a firm will get the benefit of HIGHER REAL WAGES.

The Facts:
-The Firm raises it's productivity AND reduces prices.
-The Firm will NOT pay its workers more.

The Conclusion:
-The Workers' real wages will RISE because of lower prices.

The Logic:
Since the Worker's wages don't increase, the only way that the workers would gain the benefit of higher real wages is if they're buying things that now cost less money. We need to find an answer that states that idea (or something similar).

The only answer that accounts for the logic is C. Answer A doesn't mention the workers, so it doesn't support the conclusion about the workers.

GMAT assassins aren't born, they're made,
Rich

[theunheardmelody]

C due to the same chain of reasoning above.