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# Three large companies and seven small companies currently

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Three large companies and seven small companies currently [#permalink]

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10 Oct 2008, 18:04
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Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business.

Which of the following is an assumption on which the author’s argument relies?

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.
B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies.
C. Industry lobbyists will be unable to dissuade the government from regulating the industry.
D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures.
E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated.
[Reveal] Spoiler: OA

Last edited by Zarrolou on 10 Aug 2013, 05:27, edited 1 time in total.
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10 Oct 2008, 19:46
vksunder wrote:
Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business.

Which of the following is an assumption on which the author’s argument relies?

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.
B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies.
C. Industry lobbyists will be unable to dissuade the government from regulating the industry.
D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures.
E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated.

Is it E ? If we negate E, the argument that "none of the 7 small companies will remain in the business" will not hold good.
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10 Oct 2008, 22:46
E
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11 Oct 2008, 06:10
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vksunder wrote:
Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business.

Which of the following is an assumption on which the author’s argument relies?

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product. -> govt will regulate and we are to discuss about its effects !!
B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies. -> out of scope
C. Industry lobbyists will be unable to dissuade the government from regulating the industry. -> OOS
D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures. -> OOS
E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated. -> This is PERFECT since if this were not true surely the argument falls apart

IMO E
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11 Oct 2008, 14:19
OA - E. But could someplease explain what is wring with B.

Amitdgr - THe conclusion is also weakened if you negate B. What say?
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11 Oct 2008, 18:36
From B we cannot conclude if small companies can afford that or not. It may cost more but it may be affordable.
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28 Jun 2013, 00:01
vksunder wrote:
OA - E. But could someplease explain what is wring with B.

Amitdgr - THe conclusion is also weakened if you negate B. What say?

Cost is not a factor here and it is nowhere discussed in argument.
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28 Jun 2013, 02:25
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vksunder wrote:
OA - E. But could someplease explain what is wring with B.

Amitdgr - THe conclusion is also weakened if you negate B. What say?

If you negate B, it would only mean that the cost of replacement is either same for both small and large companies or higher for larger companies. The affordability of replacement is being compared instead of the absolute cost of replacement.

Larger companies, assuming they are cash rich, can bear higher cost of replacement and would still see smaller companies exit the market since they couldn't bear even a lower replacement cost!
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Re: Three large companies and seven small companies currently [#permalink]

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14 Apr 2014, 16:28
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Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to if new set of manufacturing specifications, only the three large companies will be able to remain in business.

Notes
10 companies make a product
Govt will place requirements on the industry.
7 companies can't afford any change
Only 3 big companies will stay in business

ASU:
7 companies can't combine
3 companies can afford the change
Other factors resulting from change won't shut the 3 companies down.

Which of the following is an assumption on which the author’s argument relies?

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.

Wrong:
If the government doesn't regulate the industry isn't an issue.

B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies.

Wrong (and a trap):
Conversion costs between companies isn't an issue.

C. Industry lobbyists will be unable to dissuade the government from regulating the industry.

Wrong:
Lobbyists are not part of argument.

D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures.

Wrong:

E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the governm

Correct:
If the seven companies meet the governments requirements, then they wouldn't go out of business.
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Re: Three large companies and seven small companies currently [#permalink]

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28 Apr 2014, 08:25
It is clearly stated in premise - "In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications".

So my question is,-

1) In case of answer choice B - Only if the cost is higher then only we have the question of affordability, which the 7 small companies cannot bear. Thus B should be the answer.

2) In case of answer choice E - It is possible that small companies does not manufactures the product to a set of specifications that would match those the government. And 7 small companies might have to upgrade their production lines. Now the question should be if the upgradation is affordable or not for the smaller companies. If any smaller companies can bear the cost then they will remain in the competition.

The colclusion is - "the 7 small companies will be out of the competition."So when the small companies will be out of compitition only if they cannot afford the upgradation. And in the premise author already predicts that the 7 small companies will be out of the compition. Thus the author is sure that the small companies will have to upgrade. Thus I think E shouldn't be right.
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Re: Three large companies and seven small companies currently [#permalink]

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07 May 2014, 08:25
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Hi

Let me share my two cents here.

I believe the fundamental point you missed in the argument was that none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications. The cost of conversion here is not important. Even if the cost of conversion is very low, the argument tells us that small companies can’t afford to convert.

DoNow wrote:
It is clearly stated in premise - "In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications".

So my question is,-

1) In case of answer choice B - Only if the cost is higher then only we have the question of affordability, which the 7 small companies cannot bear. Thus B should be the answer.

B tells us that Conversion of small companies would be more expensive than that of large. But whatever the cost of conversion is (higher or lower than that of big companies), we already know from the passage that none of the 7 small companies can afford the conversion. Thus, B doesn’t affect the argument and thus, can’t be the correct choice.

DoNow wrote:
2) In case of answer choice E - It is possible that small companies does not manufactures the product to a set of specifications that would match those the government. And 7 small companies might have to upgrade their production lines. Now the question should be if the upgradation is affordable or not for the smaller companies. If any smaller companies can bear the cost then they will remain in the competition.

The colclusion is - "the 7 small companies will be out of the competition."So when the small companies will be out of compitition only if they cannot afford the upgradation. And in the premise author already predicts that the 7 small companies will be out of the compition. Thus the author is sure that the small companies will have to upgrade. Thus I think E shouldn't be right.

The conclusion is that 7 small companies will be out of competition BECAUSE none of them can afford to convert their production lines to a new set of manufacturing specifications.

The author claims that small companies would go out of competition as they can’t afford. However, he doesn’t consider the scenario in which a small company might have already been working as per govt specification. In this case, the company doesn’t need to convert. Therefore, in this scenario, a small company may continue to exist. It means that the conclusion will not hold if option E is negated. Thus, option E is a required assumption and hence, the correct answer.

Does this help?

Dolly
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Re: Three large companies and seven small companies currently [#permalink]

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10 Jan 2015, 04:48
Can someone please explain the issue with option D. IMO, if the assembly is complex, it would cost more and hence the 7 smaller companies would not be able to afford it.
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Re: Three large companies and seven small companies currently [#permalink]

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22 Mar 2015, 13:54
vksunder wrote:
Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business.

Which of the following is an assumption on which the author’s argument relies?

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.
B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies.
C. Industry lobbyists will be unable to dissuade the government from regulating the industry.
D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures.
E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated.

B/w B and E, E seems to be more of a choice that is taken for granted and is more 'bland'. Negation of this destroys the argument more than what B does.
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Re: Three large companies and seven small companies currently [#permalink]

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27 Oct 2015, 21:31
egmat wrote:
Hi

Let me share my two cents here.

I believe the fundamental point you missed in the argument was that none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications. The cost of conversion here is not important. Even if the cost of conversion is very low, the argument tells us that small companies can’t afford to convert.

DoNow wrote:
It is clearly stated in premise - "In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications".

So my question is,-

1) In case of answer choice B - Only if the cost is higher then only we have the question of affordability, which the 7 small companies cannot bear. Thus B should be the answer.

B tells us that Conversion of small companies would be more expensive than that of large. But whatever the cost of conversion is (higher or lower than that of big companies), we already know from the passage that none of the 7 small companies can afford the conversion. Thus, B doesn’t affect the argument and thus, can’t be the correct choice.

DoNow wrote:
2) In case of answer choice E - It is possible that small companies does not manufactures the product to a set of specifications that would match those the government. And 7 small companies might have to upgrade their production lines. Now the question should be if the upgradation is affordable or not for the smaller companies. If any smaller companies can bear the cost then they will remain in the competition.

The colclusion is - "the 7 small companies will be out of the competition."So when the small companies will be out of compitition only if they cannot afford the upgradation. And in the premise author already predicts that the 7 small companies will be out of the compition. Thus the author is sure that the small companies will have to upgrade. Thus I think E shouldn't be right.

The conclusion is that 7 small companies will be out of competition BECAUSE none of them can afford to convert their production lines to a new set of manufacturing specifications.

The author claims that small companies would go out of competition as they can’t afford. However, he doesn’t consider the scenario in which a small company might have already been working as per govt specification. In this case, the company doesn’t need to convert. Therefore, in this scenario, a small company may continue to exist. It means that the conclusion will not hold if option E is negated. Thus, option E is a required assumption and hence, the correct answer.

Does this help?

Dolly

Hi Dolly/egmat,
Thanks for this great explanation. +1 Kudos.
Eventhough I selected E, I am still looking over A and trying to convince myself that it is wrong. But i am not able to. Can you please help!
Option A tells us that all 3 big companies would definitely sustain if the regulations wernt there. So that can also be a good assumption as into why only the 3 large companies wud sustain.
Thanks,
John.
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Re: Three large companies and seven small companies currently [#permalink]

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12 Dec 2015, 05:07
vksunder wrote:
Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business.

Which of the following is an assumption on which the author’s argument relies?

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.
B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies.
C. Industry lobbyists will be unable to dissuade the government from regulating the industry.
D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures.
E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated.

A. The argument is about the small companies going out of business. Nothings happens to the large companies as per argument. So assumptions in that direction. OUT!
B. The argument says - the seven companies will not be able t afford the conversion of production lines. Now whether that cost is more or less or in fact equal for large and small companies is out of context. As per the argument, the amount small or large wouldn't make a difference, the small companies will move out of the business irrespective. There is not relative discussion that concludes who can afford what. OUT!
C. Lobbyists? Extraneous! OUT!
D. Complexity doesn't account for affordability. OUT!
E. It says none of the small companies, as of today, manufactures based on the new specifications. Hence, they ALL will have to incorporate the change to accommodate new specifications. Makes Sense! Negate this, and the argument falls apart. Confirmed correct choice!

Hope this helps! +Kudos if it did!
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Re: Three large companies and seven small companies currently [#permalink]

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10 Jul 2016, 17:33
absolutely E. All the other answer choices does not necessarily have to be true. E does.
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Re: Three large companies and seven small companies currently [#permalink]

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07 Aug 2016, 02:58
The assumption here is to find out a way that the seven small companies will not be able to adjust to the government changes. this is empower gmat approach
or find they will be able to deliver according to the government principle and then negate it . this is e-gmat approach. a straight ridiculous approach.

I will go with empower approach. and E gets the answer. Look at the bigger picture and find a way that they will not be able to be in sync with the government regulations
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Re: Three large companies and seven small companies currently [#permalink]

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07 Jan 2017, 05:41
Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business.

Which of the following is an assumption on which the author’s argument relies?

Let me express my 2 cents,please correct me if anything is wrong

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.
-- the scope of the conclusion is that what will happen to the 7 small companies if the government regulates the industry.Anything happens if the government DOESN'T is out of scope.

B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies.
-- this argument doesn't necessary hold true.As stated that 7 companies couldn't afford the change in their production line,it's irrelevant to whether the reason behind is that their costs of change are higher than those of three large companies.In fact the 7 companies may not able to change their production line even the cost is very insignificant.

C. Industry lobbyists will be unable to dissuade the government from regulating the industry.
-- totally out of scope.There is no relation with the success of the lobbyist.

D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures.
-- The change in production line is not equivalent to the more complexity;it could be that the new specs is much more simpler but the change is still require as there is inevitable to adapt from the existing production line.

E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated.
-- This is what we are looking for.The negation of this argument reads : SOME of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated. This mean some of them need to adjustment;hence could stay in business.

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Re: Three large companies and seven small companies currently   [#permalink] 07 Jan 2017, 05:41
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