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A product that represents a clear technological advance over

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A product that represents a clear technological advance over [#permalink] New post 27 Sep 2012, 16:40
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A
B
C
D
E

Difficulty:

  95% (hard)

Question Stats:

46% (02:15) correct 54% (02:02) wrong based on 107 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 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.
i confused between B & E
i found explanation on on mgmt forum too , bt options were different in some way .....
[Reveal] Spoiler: OA

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Re: bold face CR (Expert please help) [#permalink] New post 27 Sep 2012, 20:31
While solving a BF CR question, i always make sure to FIRST understand the Premises and Conclusion the argument is making on the whole and then secondly look at the BF parts regarding the role they are playing in that Total argument.
So the argument presents a statement that A product that represents a clear technological advance over competing products can generally command a high price.
Then it is followed by a Premise that how some companies try to garner MAX profits from a technological advancement because technological advances tend to be quickly surpassed

The argument then provides a Secondary Premise that Large profits give competitors a heads up to follow the product and earn their share of profts as well.

Then argumnet concludes that in order to maximize overall profit from a new product the strategy should be to charge less than the greatest possible price.

[color=#00ffff]Deconstructing the argument as done in AWA also -Firstly The argument provides a strategy , then tells how companies react to that strategy and concludes what strategy to be followed in order to max the profits. [/color]Now it becomes easier to understand the roles of BF 1 and BF 2.

{A} and {C} can be easily cancelled, as in no way BF 1 is an assumption instead it is a clearly written premise.

{D} although the first part of AC about BF 1 is correct, the other part about BF 2 is not correct, BF 2 is not in support of BF 1, BF 2 infact adds further on BF 1

{E} The statement about BF 1 is not correct - it in no way suggests that adopting it will not have the intended effect, infact there is no


{B} correctly deciphers the role playing of BF 1 and BF 2. Role of BF 2 becomes clear more from the statement following it, which starts with a "But" and suggests how this profit maximization makes competitors to adopt the product and reap benefits. Thus proving that Role of BF 2 is to raise a consideration which calls into question the idea of adopting it



This has been a lenghty post, apologies for that.
Hope it helps.
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Re: bold face CR (Expert please help) [#permalink] New post 27 Sep 2012, 22:23
methevoid wrote:
{E} The statement about BF 1 is not correct - it in no way suggests that adopting it will not have the intended effect, infact there is no


Hi Methevoid

I did not totally understand your point of why E is wrong. Can you please elaborate? We do not mind long post :-D

Thanks in advance !
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Re: A product that represents a clear technological advance over [#permalink] New post 02 Oct 2012, 04:03
Perhaps I can help...

The strategy the question is talking about is not to mazimise the price, but to charge less than the greatest possible price (as per the final sentance). With this in mind E becomes incorrect because it is saying that many companies will charge the maximum tolerated price which is NOT the strategy the argument refers to. This element is of the argument is saying that this is a temptation.

So turning to B: The first BF is saying that the the appeal of a strategy is to maximise profits before the technology is overtaken (correct for B) and the second BF is saying that other companies use a different strategy and thereby calls into question this strategy (correct).

I think the trick is to reckognise that the second BF isn’t actually the strategy the argument is refering to. This is a strategy that OTHER companies use.

That was a toughie!

B.
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Re: A product that represents a clear technological advance over [#permalink] New post 02 Oct 2012, 20:32
Skientist wrote:
I think the trick is to reckognise that the second BF isn’t actually the strategy the argument is refering to. This is a strategy that OTHER companies use.
.


Hi Skientist
Thanks for the reply

I am not yet convinced. How did you come at the conclusion tha the second BF isn’t actually the strategy the argument is refering to?

My thoughts
Premise 1 - A product that represents a clear technological advance over competing products can generally command a high price
Premise 2 - 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
Premise 3 - But large profits on the new product will give competitors a strong incentive to quickly match the new product’s capabilities
Conclusion - Consequently, the strategy to maximize overall profit from a new product is to charge less than the greatest possible price (This is the New Strategy)

BF1 - technological advances tend to be quickly surpassed – acts as a statement/fact/consideration
BF2 - many companies charge the greatest price the market will bear when they have such a product – Common strategy adopted based on the fact as given above

Option B
1st Part - The first is a consideration raised to explain the appeal of a certain strategy; (appeal of a certain strategy i.e “to maximize overall profit from a new product is to charge less than the greatest possible price “)
2nd Part - the second is a consideration raised to call into question the wisdom of adopting that strategy (Does it? I do not think so. The strategy has been devised based on these findings rather than the other way round)

Option E
1st Part - The first is a consideration raised to show that adopting a certain strategy is unlikely to achieve the intended effect; (If you think that Option B 2nd Part is correct, then on the same basis, this is also correct)
2nd Part - the second is presented to explain the appeal of that strategy (Exactly, the strategy i.e. the conclusion is base on the premises 1 and 2)

:? :roll:
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Re: A product that represents a clear technological advance over [#permalink] New post 04 Oct 2012, 00:49
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Hi getgyan

I'll just focus on whether the second BF is the strategy, or whether the conclusion is the strategy because I think if we can agree on that, the B / E choice flows naturally and obviously out of that.

If I were to ask you what the strategy of a company should be, based on the info in the argument you would say to charge a slightly lower price the maximally possible. You'd say this because this is the conclusion drawn from the argument. The second BF is therefore, by default, not the strategy (because clearly there cannot be 2 conflicting strategies).

Have I answered you're question? I kinda feel like I might have just regurgitated what I wrote above so I'm happy to elaborate further if you want.
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Re: A product that represents a clear technological advance over [#permalink] New post 04 Oct 2012, 01:02
Hi Skientist

Yes please explain further. Reasoning type question is the biggest CR bone in my throat. :roll:

Let us go elementary, if you can, please. :)

Option 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.
My doubts : 1st Clause - What is the consideration? What is the appeal? What is a certain strategy? 2nd Clause - What is the consideration? What is the wisdom? What is the strategy?

Option 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.
My doubts : 1st Clause - What is the consideration? What is a certain strategy? What is the intended effect? 2nd Clause – What is the appeal of that strategy?


I know it is too elementary, but I kind of like the Sherlock series
:-D
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Re: A product that represents a clear technological advance over [#permalink] New post 04 Oct 2012, 02:42
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How’s this?

B – In this context ‘a certain strategy’ means a ‘particular strategy’. I think you may be reading it as a strategy that is definitely going to succeed. Likewise ‘appeal’ means attraction rather than ‘to contest’. I hope I’m not being condisending but its important to be clear about the terminology. So with that in mind, Option B is saying that the first BF is something that is said to justify why a strategy is appealing (which is correct – otherwise profit won’t be maxmised before newer technology overtakes the current technology), the second BF is a reason for doubting that strategy (which is correct – because other companies are using a different strategy, maybe their strategy is better?).

E –This option is saying that the first BF says that a strategy won’t work (incorrect – its just pointing out that technology moves quickly) and the second BF says that this strategy is appealing (incorrect – the second BF is the STRATEGY of a different company. It neither explains the appeal of that strategy, nor is is it the actual strategy suggested by the argument. That strategy is in the conclusion).

Clear as mud?
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Re: A product that represents a clear technological advance over [#permalink] New post 04 Oct 2012, 06:34
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grbjha wrote:
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.
i confused between B & E
i found explanation on on mgmt forum too , bt options were different in some way .....


@getgyan - My little 1 Cent in E - First lets see the First BF ->

E. The first is a consideration raised to show that adopting a certain strategy is unlikely to achieve the intended effect
- Adopting a certain Strategy - What is the Strategy (in this argument is -

Strategy is "many companies charge the greatest price the market will bear when they have such a product."[/highlight]

Now Re-read the First BF - There is no way you can make out that because of BF1 - Strategy is unlikely to achieve the intended effect.
BF 1 mentions just a fact line, you cannot infer anything out of it



Now About the Second BF as mentioned in E ->

[i]the second is presented to explain the appeal of that strategy.
-

Re-reading the second BF - many companies charge the greatest price the market will bear when they have such a product

Now Second itself is that Strategy that argument is talking about - It is not presented to explain the appeal of strategy,as mentioned in E.

Hence E can be neglected.

Hope it is clear now.
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Re: A product that represents a clear technological advance over [#permalink] New post 07 Oct 2012, 13:27
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hey guys , i hv checked for its solution n finally find the following link :
a-product-that-represents-a-clear-technological-advance-over-136041.html?fl=similar
as per veritas expert ...none of the options are right ...so just move on ...
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Re: A product that represents a clear technological advance over   [#permalink] 07 Oct 2012, 13:27
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