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 mew 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.



Can someone please explain the method used to eliminate the choices.
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GmatPrep1 [10/09/2012] : 650 (Q42;V38) - need to make lesser silly mistakes.
MGMAT 1 [11/09/2012] : 640 (Q44;V34) - need to improve quant pacing and overcome verbal fatigue.

Don't you think that the ultimate strategy as per the argument is to charge les than the maximum price.
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GmatPrep1 [10/09/2012] : 650 (Q42;V38) - need to make lesser silly mistakes.
MGMAT 1 [11/09/2012] : 640 (Q44;V34) - need to improve quant pacing and overcome verbal fatigue.

Don't you think that the ultimate strategy as per the argument is to charge les than the maximum price.[/quote]

It is. Read the highlighted portion again. 'Charge LESS than greatest possible price' is the strategy endorsed by the argument.
But another strategy is discussed before the one endorsed by the argument. This other strategy is to charge the maximum possible. The first boldface statement is raised to explain the appeal of this other strategy. The second boldface is actually this other strategy.
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Karishma
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