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25 Apr 2023, 11:55
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A product that represents a clear technological advance over competing products can generally command a high price. Because technological advances tend to be quickly surpassed and companies want to make large profits while they still can, many companies charge the greatest price the market will bear when they have such a product. But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities. Consequently, the strategy to maximize overall profit from a new product is to charge less than the greatest possible price.
In the argument above, the two portions in boldface play which of the following roles?
A. The first is an assumption that forms the basis for a course of action that the argument criticizes; the second presents the course of action endorsed by the argument.
Incorrect. First says that technological advances happens -> competitors may get in anytime soon -> make as much as profit as you can. Second says making big profits -> Pull in competitors -> Ultimately you lose the market penetration. And clearly, second is not a course of action
B. The first is a consideration raised to explain the appeal of a certain strategy; the second is a consideration raised to call into question the wisdom of adopting that strategy.
Correct. Strategy talked here is: For advanced products, increase your price. First statement explains why one should raise money by explaining the fear of competitors chipping in anytime soon. Second statement explains how increasing profits call out all the competitors into the market. Therefore, correct.
C. The first is an assumption that has been used to justify a certain strategy; the second is a consideration that is used to cast doubt on that assumption.
Incorrect. I won't go deep into the debate of assumption vs consideration. The key thing to note down here is :Second is not casting any doubt on this assumption (that technological advances tend to surpass quickly). It may surpass. Rather, it is casting doubt or attacking against the strategy of "raising the prices".
D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.
Incorrect. Straightforward. Argument doesn't endorse the strategy which first statement is supporting (i.e. to increase the price)
E. The first is a consideration raised to show that adopting a certain strategy is unlikely to achieve the intended effect; the second is presented to explain the appeal of that strategy.
Incorrect. First is not against the strategy, rather its defending it
In the argument above, the two portions in boldface play which of the following roles?
A. The first is an assumption that forms the basis for a course of action that the argument criticizes; the second presents the course of action endorsed by the argument.
Incorrect. First says that technological advances happens -> competitors may get in anytime soon -> make as much as profit as you can. Second says making big profits -> Pull in competitors -> Ultimately you lose the market penetration. And clearly, second is not a course of action
B. The first is a consideration raised to explain the appeal of a certain strategy; the second is a consideration raised to call into question the wisdom of adopting that strategy.
Correct. Strategy talked here is: For advanced products, increase your price. First statement explains why one should raise money by explaining the fear of competitors chipping in anytime soon. Second statement explains how increasing profits call out all the competitors into the market. Therefore, correct.
C. The first is an assumption that has been used to justify a certain strategy; the second is a consideration that is used to cast doubt on that assumption.
Incorrect. I won't go deep into the debate of assumption vs consideration. The key thing to note down here is :Second is not casting any doubt on this assumption (that technological advances tend to surpass quickly). It may surpass. Rather, it is casting doubt or attacking against the strategy of "raising the prices".
D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.
Incorrect. Straightforward. Argument doesn't endorse the strategy which first statement is supporting (i.e. to increase the price)
E. The first is a consideration raised to show that adopting a certain strategy is unlikely to achieve the intended effect; the second is presented to explain the appeal of that strategy.
Incorrect. First is not against the strategy, rather its defending it
10 May 2024, 05:53
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rmahe11
Hi rmahe11
The term "consideration" in this context refers to the thoughtful examination of various factors and consequences that influence decision-making. In the argument, both boldfaced portions are used to carefully weigh the pros and cons of a pricing strategy. The first sets up a reason that seems to justify high prices, while the second provides a counterpoint that suggests this approach might not be the best long-term strategy.
Thus, the use of the word "consideration" is appropriate as it encapsulates the idea of deliberate thinking about the factors and implications associated with different pricing strategies in a competitive technology market.
Hope this helps.
Happy learning!
-Abhishek
