A product that represents a clear technological advance over competing

Though I was able to get this question right, I have a small doubt.
Going through the passage:


1) A product that represents a clear technological advance over competing products can generally command a high price.- this is merely a fact statement.

2)Surprisingly,perhaps, the strategy to maximize overall profits from a new product is to charge less than the maximum price the market will bear.
Now for this statement, I do not see that the author explicitly advocates the use of this strategy. He is merely stating it.


3)Many companies charge the maximum possible price for such a product,because they want to make as much profit as they can and technological advances tend to be quickly surpassed
This statement gives the reason why the companies adopt a certain strategy.

4)The drawback is that large profits on the new product give competitors an incentive to quickly develop a product to match the rival product's capabilities
The final statement provides a drawback of a strategy that companies generally adopt.

The only clue that the author prefers one over another is the mention of the word "drawback". Also, I could not find any conclusion in this argument either. Apart from statement 2 that comes close to being a conclusion.
The reason that i thought it wasnt a conclusion is that i could not see it being derived from anything. the author merely stated it as he would a fact.

can you help with this?

i am just rearranging the statements.

A product that represents a clear technological advance over competing products can generally command a high price.Many companies charge the maximum possible price for such a product,because they want to make as much profit as they can and technological advances tend to be quickly surpassed. The drawback is that large profits on the new product give competitors an incentive to quickly develop a product to match the rival product's capabilities====HENCE=====
Surprisingly,perhaps, the strategy to maximize overall profits from a new product is to charge less than the maximum price the market will bear.

is this making sense now..
clearly the last part IMO seems to be conclusion.
premise:large profits on the new product give competitors an incentive to quickly develop a product to match the rival product's capabilities.

hope this helps

A product that represents a clear technological advance over competing products can generally command a high price.
Surprisingly,perhaps, the strategy to maximize overall profits from a new product is to charge less than the maximum price the market will bear.
Many companies charge the maximum possible price for such a product,because they want to make as much profit as they can and technological advances tend to be quickly surpassed. The drawback is that large profits on the new product give competitors an incentive to quickly develop a product to match the rival product's capabilities

Numero uno: let's figure out the situation

- general rule
B - general strategy is outlined
- tells us why the strategy outlined above is not applied
B - points out a major drawback for rejecting the general strategy

Do the two bolded portions agree or disagree? They agree. Hunt for the correct answer.

In the argument above, the boldface play which of the following roles?

A) The first is the position that the argument advocates;the second presents grounds for rejecting an alternate position.
Reflects exactly what I wrote in my scheme. Hold.

B) The first is the position that the argument advocates; the second is an alternative position that the argument rejects.
We said the two statements agree, they go in the same direction, thus the argument doesn't reject the second position, if the argument advocates the first he must advocate the second one as well

C) The first presents a strategy for achieving a certain goal,the second presents a drawback to that strategy.
Once again the two statements agree thus this answer choice is illogical

D)The first presents a strategy for achieving a certain goal,the second presents grounds for preferring a different goal
Same here, different goal? why...they basically agree.

E)The first presents a strategy that,according to the argument, is ineffective;the second presents a way of improving the effectiveness of that strategy.
If the second bolded portion points out a drawback for not sticking to the general rule stated in boldface one, it is illogical to say that boldface one is ineffective.

This is the question. It contains a rare example of a split infinitive in official material, "to quickly develop."

Dear RichaChampion,

I'm happy to respond. I finally have a little time to devote to this.

I would say the first statement is a little more ambiguous: we could talk about it as the "position the argument advocates," or we could say that is it is "a strategy for achieving a certain goal." The only one that clearly can be eliminated on the basis of the first BF statement is (E), which is completely wrong.

Among the answer choices, there relatively uniformity in the evaluations of the first BF statement, but wild diversity in evaluations of the second. That's really going to be the basis of the decision.
The second BF is part of an argument against something, so (C) & (D) & (E) are all wrong. The subtle split is between (A) & (B)---that's probably what confuses most students. Technically, the alternate position is simply "charge the maximum profit," and the 2nd BF gives us grounds for rejecting this. I believe you understood all of this.

Does all this make sense?
Mike

In the argument above, the two portions in boldface play which of the following roles?

Let me help in this BoldFace question!

This is a general statement written in a way (by using the term "generally") that suggests that it is setting a context for the author to refute on OR disagree maybe surprisingly or willingly

This is the STRATEGY or POSITION or THE GOAL of the author, which is well supported by author

THIS IS THE COUNTER STRATEGY or COUNTER POSITION or AN ALTERNATE GOAL to the author's AND is against the author's support

Reason by the author why the alternate strategy will NOT be beneficial in long term

Here is my analysis for every option in detail :

(A) The first is the position that the argument advocates; the second presents grounds for rejecting an alternate position.
CORRECT, in terms with our analysis above!

(B) The first is the position that the argument advocates; the second is an alternative position that the argument rejects.
Here, the second statement is wrong. The second is the reason for rejecting the alternative position AND the second is not the ALTERNATIVE POSITION itself.

(C) The first presents a strategy for achieving a certain goal, the second presents a drawback to that strategy.
The second statement is wrong here again. The second presents a drawback to the alternate strategy AND not that strategy itself which author supports.

(D) The first presents a strategy for achieving a certain goal, the second presents grounds for preferring a different goal.
The second statement is wrong here again. The second presents a reason for rejecting a different goal AND not preferring a different goal.

(E) The first presents a strategy that, according to the argument, is ineffective; the second presents a way of improving the effectiveness of that strategy.
Nope, the first statement is wrong itself. Correct would be -- The first presents a strategy that, according to the argument, is effective; Second statement is even wrong as discussed in the previous option statements.

A) Correct, the first bold statement is the conclusion that the author is trying to push forward. the 2nd statement is explaining why you should support the author's position BECAUSE it is rejecting an alternative position

Official Explanation - GMATPREP:

Answer Explanation

Reasoning What roles do the two boldfaced portions play in the passage? The passage’s first sentence just introduces the general topic of prices for new, technologically advanced products. In the second sentence, the first boldfaced portion explicitly recommends a strategy for maximizing overall profit from such products. The third sentence describes a popular alternative strategy. In the fourth sentence, the second boldfaced portion explicitly describes a drawback of that alternative strategy.

A Correct. The argument advocates the strategy recommended in the first boldfaced portion; the second boldfaced portion states a drawback of an alternative strategy and thus presents grounds for rejecting the position that the alternative strategy is effective.
B The second boldfaced portion is not an alternative position, but rather a reason for rejecting an alternative position.
C The second boldfaced portion presents a drawback not to the strategy presented in the first boldfaced portion, but rather to an alternative strategy.
D The second boldfaced portion does not present any reason to prefer a goal other than maximizing profits—it presents a drawback to a strategy for attaining that goal.
E The first boldfaced portion presents a strategy the argument recommends, and the second presents a reason why an alternative strategy might be ineffective.

Understanding the argument -
A product that represents a clear technological advance over competing products can generally command a high price. Fact
Surprisingly, perhaps, the strategy to maximize overall profits from a new product is to charge less than the maximum price the market will bear. Main conclusion
Many companies charge the maximum possible price for such a product, an Alternate strategy other than the strategy recommended by the author.
because they want to make as much profit as they can and technological advances tend to be quickly surpassed. Support for the strategy other than the strategy recommended by the author
The drawback is that large profits on the new product give competitors an incentive to quickly develop a product to match the rival product's capabilities. - a drawback of the alternate strategy other than the strategy recommended by the author.

Option Elimination -

(A) The first is the position that the argument advocates (ok. Main conclusion); the second presents grounds for rejecting an alternate position. (ok. A drawback of the alternate strategy other than the strategy recommended by the author)
(B) The first is the position that the argument advocates;(ok) the second is an alternative position that the argument rejects. (No, it's not an alternative position. It's a premise that rejects the alternate strategy other than the strategy recommended by the author)
(C) The first presents a strategy for achieving a certain goal (the goal is to maximize the profits. We can say it's okay as it also shares a plan to reach that goal), the second presents a drawback to that strategy. (No. It goes in the same direction as BF1 - the author's strategy or supports the BF1)
(D) The first presents a strategy for achieving a certain goal,(the goal is to maximize the profits. We can say it's okay as it also shares a plan to reach that goal) the second presents grounds for preferring a different goal. (No. It goes in the same direction as BF1 - aligned with the same goal)
(E) The first presents a strategy that, according to the argument, is ineffective (No. according to the argument, it's effective); the second presents a way of improving the effectiveness of that strategy. (No. For the BF1 is effective, and the Bf2 just supports that strategy)