The general density dependence model can be

Question

10-13
 The general density dependence model can be 
applied to explain the founding of specialist firms
(those attempting to serve a narrow target market). 
According to this model, specialist foundings hinge on 
the interplay between legitimation and competitive 
forces, both of which are functions of the density (total 
number) of firms in a particular specialist population. 
Legitimation occurs as a new type of firm moves from 
being viewed as unfamiliar to being viewed as a natural 
way to organize. At low density levels, each founding 
increases legitimation, reducing barriers to entry and 
easing subsequent foundings. Competition occurs 
because the resources that firms seek--customers
, suppliers, and employees--are limited, but as long as 
density is low relative to plentiful resources, the 
addition of another firm has a negligible impact on the 
intensity of competition. At high density levels, 
however, competitive effects outweigh legitimation 
effects, discouraging foundings. The more numerous 
the competitors, the fiercer the competition will be and 
the smaller will be the incentive for new firms to enter 
the field.

While several studies have found a significant 
correspondence between the density dependence 
model and actual patterns of foundings, other studies 
have found patterns not consistent with the model. A 
possible explanation for this inconsistency is that 
legitimation and competitive forces transcend national 
boundaries, while studies typically restrict their 
analysis to the national level. Thus a national-
level analysis can understate the true legitimation and 
competitive forces as well as the number of foundings 
in an industry that is internationally integrated. Many 
industries are or are becoming international, and since 
media and information easily cross national borders, so 
should legitimation and its effects on overseas 
foundings. For example, if a type of firm becomes 
established in the United States, that information 
transcends borders, reduces uncertainties, and helps 
foundings of that type of firm in other countries. Even 
within national contexts, studies have found more 
support for the density dependence model when they 
employ broader geographic units of analysis--for 
example, finding that the model's operation is seen 
more clearly at the state and national levels than at city 
levels.

12.
The passage suggests that when a population of specialist firms reaches a high density level, which of the following is likely to occur?

(A) Foundings will decline despite legitimation that has occurred in these industries.
(B) Increasing competition will encourage many firms to broaden their target market.
(C) Competition for resources will become stabilized and thus foundings will be encouraged.
(D) Many customers will abandon their loyalty to older firms as more innovative firms enter the market.
(E) Firms will begin to cross national borders in an attempt to gain a competitive advantage. 
13.
The primary purpose of the passage is to

(A) question the validity of an economic model
(B) point out some inconsistencies within an economic model
(C) outline an economic model and suggest revisions to it
(D) describe an economic model and provide specific examples to illustrate its use
(E) explain why an economic model remains valid despite inconsistent research results

farend · Answer

Will go for 12->A and 13-> B.

prasannar · Answer

At high density levels,
however, competitive effects outweigh legitimation
effects, discouraging foundings  thus A for 12

Paragraph-1 explains the model
Paragraph-2 explains the inconsistencies thus B for 13

pmenon · Answer

i would say 12-A and 13-E

gixxer1000 · Answer

I get A and E

It seems we all agree on 12 so I'll explain my though process for 13.

The article is only 2 paragraphs. The enire 1st paragraph explains the model. The second paragraph points out inconcistencies but finishes explaining uses despite the consistencies. If the purpose was to only point out the consistencies then the author would spend more time on them. Also if the purpose was just to explain the inconsistencies then he/she would not conclude with additional uses despite these consistencies.

rpmodi · Answer

12 A , 13-B

My interpretation:

Author is talking about inconsistency of the economic model , he is nowhere mentioning whether these inconsistencies still keep the economic model valid and so it refutes the argument in E.

sondenso · Answer

For 12

But in the second paraghrap the author says:   other studies have found patterns not consistent with the model

Does it mean that the author suggests the reversion of what he says in the first paraghrap?

I mean:

In the quout of prasannar: high density discourages foundings. But in the green boldface he say reversally, and means that: the high density courages the foundings. So foundings must increase! is it right?

For 13:

OA is E. I think if E was sitting in the first or the second order, I will choose E immediately. But Gmac is too monster! it keeps the nearly close correct in the first to throw us. Do you think so!

gixxer1000 · Answer

When answering the primary purpose question you shoul look at the beginning and ending of the article. The beginning is where you set the tone and explain the topic and the end is where you conclude and summarize what you think about the topic.

The entire first paragraph explains the model.

The second paragraph starts out:
"While several studies have found a significant correspondence between the density dependence model and actual patterns of foundings, other studies have found patterns not consistent with the model."

So the author tells us  several  studies have found consistencies,  others  have not.

The final sentence conludes:
"Even within national contexts, studies have found more 
support for the density dependence model when they employ broader geographic units of analysis--for example, finding that the model's operation is seen more clearly at the state and national levels than at city levels."

So even after the author points out the inconsistencies he goes back and shows support for the model.

Here is the flow of the article:
1) Describe a model and show that it can work.
2) Show that several studies show consistent results and other do not.
3) Detail why others do not show consistent results.
4) Conclude that despite inconsistent results there is still applicable uses for the model.

90% of the time the primary purpose of the passage is located and the beginning and ending. You should always go back and read atleast those two sentences before choosing.

sondenso · Answer

Nice! I think you are master of Verbal! :-D

VerbalBot · Answer

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The general density dependence model can be

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