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When a company refuses to allow other companies to produce

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When a company refuses to allow other companies to produce [#permalink] New post 31 Dec 2012, 18:20
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  35% (medium)

Question Stats:

54% (01:52) correct 46% (01:25) wrong based on 110 sessions
When a company refuses to allow other companies to produce patented technology, the consumer invariably loses. The company that holds the patent can charge exorbitant prices because there is no direct competition. When the patent expires, other companies are free to manufacture the technology and prices fall. Companies should therefore allow other manufacturers to license patented technology.

The argument above presupposes which of the following?

a. Companies cannot find legal ways to produce technology similar to patented technology.
b. Companies have an obligation to act in the best interest of the consumer.
c. Too many patents are granted to companies that are unwilling to share them.
d. The consumer can tell the difference between patented technology and inferior imitations.
e. Consumers care more about price than about quality.

Will provide the OA after some explanations.
[Reveal] Spoiler: OA

Last edited by krackgmat on 01 Jan 2013, 12:18, edited 1 time in total.
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Re: Patented Technology [#permalink] New post 31 Dec 2012, 20:10
Expert's post
krackgmat wrote:
When a company refuses to allow other companies to produce patented technology, the consumer invariably loses. The company that holds the patent can charge exorbitant prices because there is no direct competition. When the patent expires, other companies are free to manufacture the technology and prices fall. Companies should therefore allow other manufacturers to license patented technology.

The argument above presupposes which of the following?

a. Companies cannot find legal ways to produce technology similar to patented technology.
b. Companies have an obligation to act in the best interest of the consumer.
c. Too many patents are granted to companies that are unwilling to share them.
d. The consumer can tell the difference between patented technology and inferior imitations.
e. Consumers care more about price than about quality.

Will provide the OA after some explanations.


Honestly speaking, I felt the problem to be of 620-640ish level.
Anyways, the conclusion is "Companies should therefore allow other manufacturers to license patented technology." On allowing the other manufacturers to license patented technology, the prices will fall and the consumers can easily have an an access on the by-products of the technology. Here the word "should" plays the vital role.
Hence indirectly, it is stated that companies have an obligation to act in the best interest of the consumer.
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Re: Patented Technology [#permalink] New post 31 Dec 2012, 22:26
krackgmat wrote:
When a company refuses to allow other companies to produce patented technology, the consumer invariably loses. The company that holds the patent can charge exorbitant prices because there is no direct competition. When the patent expires, other companies are free to manufacture the technology and prices fall. Companies should therefore allow other manufacturers to license patented technology.

The argument above presupposes which of the following?

a. Companies cannot find legal ways to produce technology similar to patented technology.
b. Companies have an obligation to act in the best interest of the consumer.
c. Too many patents are granted to companies that are unwilling to share them.
d. The consumer can tell the difference between patented technology and inferior imitations.
e. Consumers care more about price than about quality.

Will provide the OA after some explanations.



IMO A is the best choice.

A) if companies cannot find an alternative to patented technology, then they have no other choice than to license the technology otherwise only the patent holder can use it. This choice fully supports the argument and conclusion.

B doesn't mention whether the obligation to act in the best interest of the consumer relates to the usage of patented technology.

C is irrelevant because the argument isn't about quantity.

D is irrelevant

E is irrelevant
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Re: When a company refuses to allow other companies to produce [#permalink] New post 29 Jan 2013, 10:28
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krackgmat wrote:
When a company refuses to allow other companies to produce patented technology, the consumer invariably loses. The company that holds the patent can charge exorbitant prices because there is no direct competition. When the patent expires, other companies are free to manufacture the technology and prices fall. Companies should therefore allow other manufacturers to license patented technology.

The argument above presupposes which of the following?

a. Companies cannot find legal ways to produce technology similar to patented technology.
b. Companies have an obligation to act in the best interest of the consumer.
c. Too many patents are granted to companies that are unwilling to share them.
d. The consumer can tell the difference between patented technology and inferior imitations.
e. Consumers care more about price than about quality.

Will provide the OA after some explanations.



My take will be Option B.

Conclusion : Companies should allow other manufacturers to license patented technology.

If we suggest a company to allow other manufacturers to license patent despite of the fact that the monopoly of the company from the market will be lost, then the only reason is the Consumers are the ones for which Companies care and are obligated to. Hence the unsaid assumption here is "Companies have an obligation to act in the best interest of the consumer"
Re: When a company refuses to allow other companies to produce   [#permalink] 29 Jan 2013, 10:28
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