To maintain a high demand for their product, the manufacturers first

I think you have to apply the logic test here. Because at first glance, it does seem like "they" can refer to both manufacturers or the special agents. But when looking at the sentence it says "first the manufacturers took over . . . next they began changing." The reasoning "they" is not ambiguous (from what I read on another forum) is that the first . . . next structure implies that whoever took the "first" action (the manufacturers), also will take the "next" action. I could somewhat buy that argument

Here as They is a part of another independent clause so it can unambiguously refer to manufacturers (Thats what i learn from this forum but i think i missed this concept)

Can someone please elaborate on this concept
Thanks in advance!!!

In D and E, The sentence starts with " to" and if we connect D or E with the actual sentence, we will find a run on sentence. rather the sentence looks incomplete, begining with prepositional phrase as if it were to modify what comes next with a comma.
C doesn't make sense as "The former" is causinf ambiguity here.
B begind with "this" , again it doesn't have an antecedent.
A is correct because They is referring to the subject( The manufacturers) of the main clause and is thus following II-ism.
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Also i found the Below concept interesting so just posting it..

It stands for "manufacturers".

Often times, the pattern after the use of semicolon is:

semicolon + conjunctive adverb + comma
; next ,

What follows that typical structure is a pronoun which refers to the subject of the independent clause --> "they" refers to "the manufacturers" for it is the manufacturers which took over the first set of actions and "they"[the manufacturers] who began changing [...]

New concept !!!! To keep in mind

A is correct. All other answer choices other than A do not create a complete sentence.

";" in the un=underlined part indicate that the underlined is a IC and need it's own subj and verb etc.

Hi All,

To maintain a high demand for their product, the manufacturers first took over the marketing and sales functions previously performed by outside agents; next, they began changing their advertising campaigns monthly to keep pace with the rapid changes in consumers’ lives.

In this sentence, pronoun “they” correctly refers to “the manufactures” grammatically as well as logically.

Grammatical standpoint: In the first Independent clause, “the manufacturers” is at the subject position doing the action of “taking over”. This sentence uses semicolon which means it should be followed by another independent clause. In this second independent clause, “they” is at the same place as “the manufacturers” is, that is at the subject place. Hence, “they” correctly refers to “the manufacturers”.

Logical standpoint: a pronoun must have a logical antecedent as well. Here, “they” can only refer to “the manufacturers” because it only makes sense to say that the manufacturers started making changes in the advertising campaigns because in order to maintain a high demand for their product, they “first” did something and next only “they” took another step. Hence, logically “they” refers to “the manufacturers”. There is no ambiguity about the reference of they in this sentence.

Hope this helps.
Thanks.
Shraddha
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@Shraddha, I understand that "they" is good in A, but I would like to know what makes C bad. It seems to be grammatically and logically correct as well. Isn't it?

The correct answer is A.

B. Incorrect pronoun and meaning distortion. "This" is ambiguous and suggests that the first change led to the second.
C. Incorrect pronoun. "The former" can only be used to apply to one of two nouns listed alongside one another; in this case "sales agents" appears in another clause as "the manufacturers."
D. Fragment, incorrect verb form. "To begin" is an infinitive and should be changed to conjugated "began"; additionally, the sentence has no subject.
E. Fragment, incorrect verb form. "To change" is an infinitive and should be changed to conjugated "began"; additionally, the sentence has no subject.
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