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# When a company refuses to allow other companies to produce

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Manager
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When a company refuses to allow other companies to produce [#permalink]

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15 Aug 2006, 15:34
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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 competition. When the patents expire, 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.

OA later..
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15 Aug 2006, 15:51
(A)?

B - There are no hints at 'obligations'
C - Nothing in the passage suggests that too many companies are doing this
D - Nothing suggests that, or otherwise
E - no correlation b/w price and quality

A is true because if another company had a legal way to produce similar technology, then the patent would not be a barrier for competition. The whole problem arises because patenting makes that competition impossible. Therefore, the fact that companies cannot find another way is the cause for the issues mentioned.

gmatcrook 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 competition. When the patents expire, 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.

OA later..
Senior Manager
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15 Aug 2006, 15:54
Between A & B, I'm leaning towards A.
Senior Manager
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15 Aug 2006, 17:30
Going with A here... both A & B are neck to neck...
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15 Aug 2006, 18:30
If companies had an obligation to act in best consumers' interest they would not ask for patents, and competition would lower the price to serve the consumers better.

A
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15 Aug 2006, 18:43
Nice alternative explanation...

BTW u2lover - so you're a girl. You know - somehow seeing bearded bono as the avatar for a girl ..... doesn't quite match well.... :) :) jus' kidding of course.

u2lover wrote:
If companies had an obligation to act in best consumers' interest they would not ask for patents, and competition would lower the price to serve the consumers better.

A
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15 Aug 2006, 19:00
necromonger wrote:
Nice alternative explanation...

BTW u2lover - so you're a girl. You know - somehow seeing bearded bono as the avatar for a girl ..... doesn't quite match well.... jus' kidding of course.

u2lover wrote:
If companies had an obligation to act in best consumers' interest they would not ask for patents, and competition would lower the price to serve the consumers better.

A

I didn't look at it that way... makes sense... I just figured I'd look at BONO myself everyday... will be easy to find my answers... 1 thing I regret is not adding GIRL to my nickname... didn't think gender reference would bother me too much when I started.... and now that GMATClub is almost like a family I feel it is unfair to be a son ... but yes I am a u2lovergirl

any way to add girl to the name??? Praetorian, if you're reading, can you do this or is this possible w/out losing my credits??? thanks anyways.
Manager
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15 Aug 2006, 19:59
This is a MGMAT question and the OA it provides is B.
Even I chose A.

Looking at the OE I feel that they caught the wrong vein of the argument.

The OE it gives is as follows -

The conclusion of the argument is that companies should allow other manufacturers to license patented technology. The basis for that claim is that not doing so keeps prices high and harms the consumer.

(A) This does not address the moral obligation (i.e. â€œshouldâ€
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15 Aug 2006, 20:04
I see the point, but I had my reason to eliminate B

and I feel OE on B doesn't really explain anything...
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15 Aug 2006, 20:08
Very good question...

Chose A but B sounds good...

The evidence talks in favor of the consumer and not the legal ways of production.

So the connector that is the assumption must align with the evidence and the conclusion.

B should be it

Can someone explain the Negation test for the assumtion please?
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15 Aug 2006, 20:32
I think the answer is clearly B for this question. The whole point of the passage, and the very point of the argument is that prices will drop if patents expire, and lower prices are good. But good for who? The consumer, not the company doing business.
Manager
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15 Aug 2006, 20:50
I feel the conclusion of the argument is not in support of price drop unless I'm missing anything.

Hence, to avoid the price drop the author wants other manufacturers to license the technology. This way the patents won't expire and the prices won't fall. Thus, inherently the argument assumes that licensing will control the price. In other words, it assumes that Companies cannot find legal ways to produce technology similar to patented technology coz if they could then the price will eventually drop.

Makes sense?
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15 Aug 2006, 21:53
I also chose A. Even if I attempt this question 10 times, I am almost sure that I will select A atleast 9 times.

You may be good if you can decipher the last line of the argument. The conclusion may have multiple meaning. It may be possible that company is doing this to increase the sales by keeping the price low rather than obligation to act in best intrest of customer. I don't think you will find such poorly worded questions in real GMAT.
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SAID BUSINESS SCHOOL, OXFORD - MBA CLASS OF 2008

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16 Aug 2006, 04:43
ps_dahiya wrote:
I also chose A. Even if I attempt this question 10 times, I am almost sure that I will select A atleast 9 times.

You may be good if you can decipher the last line of the argument. The conclusion may have multiple meaning. It may be possible that company is doing this to increase the sales by keeping the price low rather than obligation to act in best intrest of customer. I don't think you will find such poorly worded questions in real GMAT.

Dahiya: Thanks man.....it wasnt the questions that are as straight as you find !!
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16 Aug 2006, 05:45
This is the argument --->Companies should therefore allow other manufacturers to license patented technology.

The argument above presupposes which of the following?

B. Companies have an obligation to act in the best interest of the consumer.

Pretty straightforward (B) here. Nice hybrid GMAT/LSAT CR.
Re: CR: Patented Technology   [#permalink] 16 Aug 2006, 05:45
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