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A product that represents a clear technological advance over [#permalink]
 01 Aug 2011, 14:36
Question Stats:
55% (02:51) correct
44% (01:37) wrong based on 1 sessions
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 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 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. Please also explain difference between assumption and consideration.
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Although I find this a ridiculously unreal question, I will go with B: But large profits on the new product will give competitors a strong incentive to quickly match the new product’s capabilities.Basically this part is trying to explain why the strategy described above is not well-reasoned and sound. Although companies are trying to make large profits when they still can, eventually competitors match the product's capabilities and offer it for a lower price. So this statement casts a doubt on the strategy initially stated. Because technological advances tend to be quickly surpassed and companies want to make large profits while they still canThe author introduces the first bold statement as an appealing strategy for firms which he later tries to oppose with this additional statement. The only answer that comes closest to that is B : First statement introduces an appealing strategy, which might ultimately prove to be wrong. A,D,E can be eliminated because each one of them contradicts in some way or another the statements in the body of the question. IMO the trap answer is C - however, I associate "tend to be" with a consideration rather than assumption, and I also like "explain the appeal of a certain strategy" more than "justify a certain strategy" as here nothing is justified but simply taken into consideration. This is a hard question. Hope this helps a little 
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Manager
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rossiankov wrote: Although I find this a ridiculously unreal question, I will go with B: But large profits on the new product will give competitors a strong incentive to quickly match the new product’s capabilities.Basically this part is trying to explain why the strategy described above is not well-reasoned and sound. Although companies are trying to make large profits when they still can, eventually competitors match the product's capabilities and offer it for a lower price. So this statement casts a doubt on the strategy initially stated. Because technological advances tend to be quickly surpassed and companies want to make large profits while they still canThe author introduces the first bold statement as an appealing strategy for firms which he later tries to oppose with this additional statement. The only answer that comes closest to that is B : First statement introduces an appealing strategy, which might ultimately prove to be wrong. A,D,E can be eliminated because each one of them contradicts in some way or another the statements in the body of the question. IMO the trap answer is C - however, I associate "tend to be" with a consideration rather than assumption, and I also like "explain the appeal of a certain strategy" more than "justify a certain strategy" as here nothing is justified but simply taken into consideration. This is a hard question. Hope this helps a little Thanks for your try and approach. Question is from GMATPREP so not unrealistic, it is definiatly hard.
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i see that same problem is posted on gmatclub prep-bf-65020.htmloptions are different. B in the above link shows a different view compared with the B in rphardu's post..
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B reflects the role of the statements in the argument
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First, I would try to eliminate any choice if I can. Here, I am very sure that, first statment is not an assumption, so eliminate A and C Second, Try to get the tone of the first statement. Here I see, first statement is trying to have some positive effect on the argument, so I would eliminate any option which is attributing negative tone to First Statement. So eliminate E So, we are remaining with B and D. Now, I would take Second statement as well into consideration and compare its tone with first statement's tone. Here, I find impacts of both of these on the conclusion (the strategy). So I can eliminate D as well because it says both of these statements are going in the same direction (support). So I remain with B, which is also the right answer
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B...
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C is wrong as it mentions that second bold phrase is a consideration doubting the first bold phrase. However, the second bold phrase only talks about the previous sentence (about profit making). There is no doubt cast on the first bold phrase in the whole argument. B is best option since the second phrase talks about a way in which competitors can cash in in terms of price and quickly reaching similar product qualities. (calls into question the strategy adopted by the companies that charge high prices)
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