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# When a company refuses to allow other companies to produce

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

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29 May 2012, 10:10
mysterio wrote:
nitya34 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.

[Reveal] Spoiler: OA
B

conclusion : companies should allow other manufacturers to license patented technology.
premise : consumers loses because companies holding patent charge in-exorbitant prices in absence of direct competition.
premise : price fall when patent expires.

after going thru the options I narrowed it down to A and B as other options seem out of scope. D& E talks abt consumers preferences, while C talks abt no of patent, again irrelevant to conclusion.

negating A : companies can find legal ways to produce tech. similar to patent. This rules out the possibility tht there is absence of direct competition, thus company is getting higher price becoz of its prod rather thn monopoly in mkt. thsu conclusion falls apart.

similarly negating B : companies do not have an obligation to serve in best interest of customer. so company holding patent can charge higher price and it should not share its patent. again conclusion falls apart.

really close btw A n B .... only thing tht gives edge to B is tht A talks abt similar technology not exactly the same patent.

Mysterio,
I agree that 'similar' is the key in the option A which makes option B stronger than A.
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Re: When a company refuses to allow other companies to produce [#permalink]

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31 May 2012, 23:07
In the first sight, I do not know how to choose the right answer. I choose randomly between C and B.
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Re: When a company refuses to allow other companies to produce [#permalink]

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02 Jun 2012, 09:19
I got B and i think it is the OA.
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Re: When a company refuses to allow other companies to produce [#permalink]

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07 Jun 2012, 00:31
Here it is assumed that companies are more interested in serving the customers than for the profits. The main aim of the arguement is to provide customers with affordable products that use the patented technology.

(A) Companies cannot find legal ways to produce technology similar to patented technology. - Already mentioned in the argument that companies with patents do not allow others to produce the technology. Though there is a way, they restrict the mass production by other manufacturers. - Incorrect
(B) Companies have an obligation to act in the best interest of the consumer. - The thought of allowing other manufacturers to produce patented technology shows that companies are obligated to act in the best interest of the consumers. - Correct
(C) Too many patents are granted to companies that are unwilling to share them. - No where mentioned in the arguement - Incorrect
(D) The consumer can tell the difference between patented technology and inferior imitations. - Out of scope - Incorrect
(E) Consumers care more about price than about quality - The arguement presents the manufacturers perspective rather than the consumer behavior - Irrelevant - Incorrect
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Re: When a company refuses to allow other companies to produce [#permalink]

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29 Jan 2013, 06:14
nitya34 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.

[Reveal] Spoiler: OA
B

Premise-The company which hold the patents causes the price hike, by not allowing other companies to manufacture patented technology.
Conclusion-Companies should allow other manufacturers to seek license to manufacture the patented technology.
(if they do so then the Price would not hike and the customers would not suffer)

(B) wins
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Re: When a company refuses to allow other companies to produce [#permalink]

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29 Jan 2013, 19:05
i have chosen 'A', but answer is no doubt 'B',
sidhu your explanation was good, finally i got: "Why not A"

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

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30 Jan 2013, 02:59
If you negate A, the conclusion that falls apart would be that prices shoot up. ( alternatives will ensure that prices not shoot up and fair price maintained.)
But this is not the conclusion. this argument doesnt talk about price mechanism. It talks about consumer suffering because of patents.
A, as an assumption supports this conclusion as well but not directly compared to B. hence B is better choice. Always choose option that "directly"
or more closely addresses the real conclusion/theme of the argument.

Hope this helps

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

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09 Feb 2013, 18:55
This is a REALLY tricky question. All five answers can be supported. The real question is, what is "the argument"?

When a company refuses to allow other companies to produce patented technology, the consumer invariably loses.
This statement is highly questionable. For example, Apple Inc. does not allow its competitors to produce i-Phones and i-Pads, and it does charge exorbitant prices. Yet we cannot say that the consumers necessarily lose, because consumers also care about quality. Thus, in a sense, this statement presupposes E (consumers care more about price than about quality).

In fact, the very existence of the system of patenting suggests that patents are good for the consumer. If the patent system did not allow Apple to charge exorbitant prices, there would, arguably, be no i-Pods and no i-Phones. Patents incentivise companies to innovate so they can later charge exorbitant prices.

The company that holds the patent can charge exorbitant prices because there is no direct competition.
This statement is highly questionable. McDonald's is the only one producing Big Mac's, and there is no direct competition, but there is indirect competition (other hamburgers ). Thus, McDonald's cannot charge exorbitant prices.

This statement thus presupposes A and D. If other companies could produce similar unpatented technology, the company in question would not be able to charge exorbitant prices. For example, companies other than Apple can produce other smartphones, and the price for i-Phones will necessarily keep going down because of that. However, if you know the story with the patent that Singer used for his sewing machine, you would see how carefully designed patents actually allow the company to charge exorbitant prices for much longer. Thus, here (A) is clearly an assumption. The same can be said about (D): if the consumers cannot tell the difference between patented technology and inferior imitations, patenting company would not be able to charge exorbitant prices.

When the patent expires, other companies are free to manufacture the technology and prices fall.
This is just common sense; no assumptions.

Companies should therefore allow other manufacturers to license patented technology.
Note the "therefore". In reality, this is a completely ridiculous conclusion. Try to tell Apple they they should license their i-Phones so others can produce them. Why?! Well, (B) offers a nice explanation: because companies should act in the best interest of the consumer.

In a sense, (C) can also be considered an assumption. From a practical point of view, if there is no problem, then there is nothing to argue about. Thus, if this issue was raised, then, chances are, somebody thinks that too many patents are granted to selfish companies. However, "too many" is highly subjective, and thus looks like a poor answer.

Overall, I support (B). This is because (A), (D), (E) are assumptions underlying the premises, but only (B) is an assumption underlying the actual argument, the actual inference. If it is given that the company that holds the patent can charge exorbitant prices, then (A) is no longer an assumption.

I think the point is to distinguish, which assumptions are needed for the premises vs. which assumptions are needed for the implication. For example, if you negate (A) and add it to the premises, you get a contradiction. If you add (B) to the premises, it strengthens the implication; if you add not (B) to the argument, it weakens the implication. Note that if you add (C) to the premises, it somewhat strengthens the argument, and if you add not (C) to the premises, it somewhat weakens the argument, but not as obviously as with (B).

In a sense, (C) suggests (B); but (B) is more explicit.
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Re: When a company refuses to allow other companies to produce [#permalink]

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10 Feb 2013, 06:57
I guess this question generated a lot of discussion! When evaluating answer choice A, it's important to understand that, when the stem says the "consumer invariably loses" if companies don't share patents, that is a *premise* of the argument - it's a fact, and cannot be wrong. So whether other companies are able to imitate patented technology makes no difference; the premise that consumers will lose must still be true. Answer A is just a trap answer; it is only tempting if you're trying to disprove one of the premises of the argument, and you are always doing something wrong if you're trying to attack a premise in a CR assumption or weaken question.

The argument essentially says: "Companies with exclusive patents charge high prices. So companies should share their patents." There's a massive gap in that argument - *why* should companies share patents? We're assuming there's something wrong with companies charging high prices. That is why B is the right answer.
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Re: When a company refuses to allow other companies to produce [#permalink]

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14 Sep 2014, 04:14
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Re: When a company refuses to allow other companies to produce [#permalink]

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13 Oct 2014, 08:14
Technext 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?

Explanation:

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

How did we arrive at this conclusion? What if the companies don’t allow licensing of patented technology? If they don’t, consumers will suffer. But why should the companies really consider consumers?
-----------------------
A. Companies cannot find legal ways to produce technology similar to patented technology.
---> Does not address the issue raised above.

B. because Companies have an obligation to act in the best interest of the consumer. ---> This option answers the last question, thus, pointing to the presupposition involved.

C. Too many patents are granted to companies that are unwilling to share them. ---> Not necessarily true for arriving at the argument.

D. The consumer can tell the difference between patented technology and inferior imitations.
---> Irrelevant. Does not address the issue raised above.

-----------------------

I think it should be option B.

Regards,
Technext

Good explanation.
I feel B is correct only if there would have a last sentence about license.
If B is correct then it s contradicting Argument itself. If 'Companies have an obligation to act in the best interest of the consumer' then why they would increase prices exorbitantly ?
Author is conforming that companies can charge exorbitant prices. If they really care for consumer then companies won't increase price irrespective of competition.

Correct me if i am wrong.
Thanks
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Re: When a company refuses to allow other companies to produce [#permalink]

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13 Oct 2014, 20:25
Rudranket wrote:
Technext 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?

Explanation:

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

How did we arrive at this conclusion? What if the companies don’t allow licensing of patented technology? If they don’t, consumers will suffer. But why should the companies really consider consumers?
-----------------------
A. Companies cannot find legal ways to produce technology similar to patented technology.
---> Does not address the issue raised above.

B. because Companies have an obligation to act in the best interest of the consumer. ---> This option answers the last question, thus, pointing to the presupposition involved.

C. Too many patents are granted to companies that are unwilling to share them. ---> Not necessarily true for arriving at the argument.

D. The consumer can tell the difference between patented technology and inferior imitations.
---> Irrelevant. Does not address the issue raised above.

-----------------------

I think it should be option B.

Regards,
Technext

Good explanation.
I feel B is correct only if there would have a last sentence about license.
If B is correct then it s contradicting Argument itself. If 'Companies have an obligation to act in the best interest of the consumer' then why they would increase prices exorbitantly ?
Author is conforming that companies can charge exorbitant prices. If they really care for consumer then companies won't increase price irrespective of competition.

Correct me if i am wrong.
Thanks

(B) doesn't contradict the argument. (B) says that companies should act in the best interest of the consumer. It doesn't say whether the companies do actually act in the best interests of the consumer. The argument says that since the consumer loses when the company doesn't let other manufacturers make patented products so the company should let other manufacturers make. So the argument is assuming that the companies care about consumers' loss.
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Re: When a company refuses to allow other companies to produce [#permalink]

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08 May 2015, 03:36
nitya34 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.

[Reveal] Spoiler: OA
B

B is best.NEGATE d.
Companies do have an obligation to act in the best interest of the consumer.-destroys argument(Companies should therefore allow other manufacturers to license patented technology)
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Re: When a company refuses to allow other companies to produce [#permalink]

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20 Jul 2016, 22:19
Hello from the GMAT Club VerbalBot!

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

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21 Jul 2016, 05:06
Top Contributor
nitya34 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.

[Reveal] Spoiler: OA
B

There are many possible presupposes,so I followed the process of elimination to get the question Correct

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. .......>Outside the scope of the argument
(B) Companies have an obligation to act in the best interest of the consumer. ...........>Correct.it is necessarily assumed to hold the argument valid/true
(C) Too many patents are granted to companies that are unwilling to share them. ........>New information that is outside the scope of the argument
(D) The consumer can tell the difference between patented technology and inferior imitations. ......>New information that is outside the scope of the argument

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