When a company refuses to allow other companies to produce : GMAT Critical Reasoning (CR)
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# When a company refuses to allow other companies to produce

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

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15 Oct 2006, 10:44
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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 direct 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.
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15 Oct 2006, 11:07
karlfurt 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 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.

I am picking D but I don't have a very good explaination right now
I am thinking because argument mentions that the consumer loses invariable when there is no competition, and when the patent expires, prices fall. So it is better to allow licensing patents because then the prices won't fall so much and consumers can tell the difference between patented tech and other imitations.
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15 Oct 2006, 11:30
i think its a toss up between A and B, and a very hard toss up at that

I'm going to go for A, because it does take for granted that if a product is patented then a competitor cannot produce a similar competitive product.

B is also true, but there is more emphasis on the technology that how companies should behave altruistically.
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15 Oct 2006, 11:38
I also think it is A.

B is also true but B is more like a generalized statement and away from the context. Companies might be doing something good for the consumers.
Director
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15 Oct 2006, 15:45
I'm picking E.
Director
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15 Oct 2006, 15:53
Chose A.
Manager
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15 Oct 2006, 16:45
I think its B...

The conclusion is that companies should allow other manufacturers to license patented technology in order to reduce losses to consumers.

Why should they do this?...

B is the only choice that fills this gap..

plus I went with my 'hunch' test... A choice similar to B came to mind immediately after reading the question.. I guess we'll see if my intuition is wrong..
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15 Oct 2006, 18:38
B for me.

consumer is the main point here.
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15 Oct 2006, 18:52
karlfurt 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 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.

I think the highlighted text above is key to solving this problem. If we read them together, we will agree B is a better choice than A.
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Director
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15 Oct 2006, 19:40
B

A.Companies cannot find legal ways to produce technology similar to patented technology.
-no part in the argument that talks about alternatives.

B.Companies have an obligation to act in the best interest of the consumer.
CORRECT. only reason companies should let others license their patented technology is not to let the consumer lose . This is evident in the second line of the argument.

C.Too many patents are granted to companies that are unwilling to share them.
- irrelevant

D.The consumer can tell the difference between patented technology and inferior imitations.
- irrelevant

- very close, but there is no indication that consumers are not buying the patented products just because they are expensive. All that is implied is that the consumer is paying exorbitant prices for patented technology.
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15 Oct 2006, 21:55
Between A and B, I'm going for B.
A comes close but it looks more like an inference to me...
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15 Oct 2006, 22:10
Agree..it should be B.
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16 Oct 2006, 07:21
I think its A as it addresses the core issue of "the consumer invariably loses"

Negate it and the rest of the argument falls apart .

If other companies are able to produce similar products without voilating the patents consumer will not be affected as presumed in the first statement.
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16 Oct 2006, 07:27
Agree with A.

What is OA?
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16 Oct 2006, 08:45
I go with (A) .
The last sentence "Companies should therefore allow other manufacturers to license patented technology." clearly states that other manufactureres are dependent on the companies to grant them a licence.Hence they have to wait on them.Because "Companies cannot find legal ways to produce technology similar to patented technology"
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16 Oct 2006, 19:53
My choice is "B".
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18 Oct 2006, 04:58
OA?
Director
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18 Oct 2006, 05:05
Including my voice, 7 were for A, 7 for B, 1 D, 1 E.

There is no majority to decide which answer is the right one, so let mgmat proclaim the OA.

OA is B

I think I have to clarify what presuppose means or whether it is the same as assume...

If we are looking for an assumption, I understand why B could be correct, but dont't understand why A is incorrect. Usually, an assumption, if negated, makes the argument invalid, and thus is the right answer. This is the "negation test".

If we assume that companies can find legal ways, then clearly they don't have to wait and monopolistic companies don't need to provide their patents...
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18 Oct 2006, 07:38
(B) just makes sense. Still having difficulties differentiating between a presupposition and an assumption.
18 Oct 2006, 07:38
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