GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 19 Oct 2019, 15:12

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

A product that represents a clear technological advance over competing

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Find Similar Topics 
VP
VP
avatar
Joined: 04 May 2006
Posts: 1383
Schools: CBS, Kellogg
A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post Updated on: 12 Oct 2018, 03:49
4
26
00:00
A
B
C
D
E

Difficulty:

  45% (medium)

Question Stats:

69% (02:08) correct 31% (02:21) wrong based on 1449 sessions

HideShow timer Statistics

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 maximum possible price for 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.

(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.

(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.

(D) The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.

(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.


Similar Question : LINK1 & LINK2

_________________

Originally posted by sondenso on 06 Jun 2008, 02:44.
Last edited by Bunuel on 12 Oct 2018, 03:49, edited 7 times in total.
Renamed the topic and edited the question.
Most Helpful Expert Reply
GMAT Club Verbal Expert
User avatar
D
Status: GMAT and GRE tutor
Joined: 13 Aug 2009
Posts: 2864
Location: United States
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post 20 Feb 2018, 11:41
9
1
1
Quote:
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 maximum possible price for 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.

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.

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.

D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.

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.

With any BF question, start with the conclusion, if possible: "the strategy to maximize overall profit from a new product is to charge less than the greatest possible price."

Now let's look at the argument WITHOUT worrying about the BF:

  • "A product that represents a clear technological advance over competing products can generally command a high price." - If your company comes up with a technologically advanced product, you can charge 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 maximum possible price for such a product." - You can charge a high price because your product has a technological advantage over competing products. You assume that whatever technological advantage you have will soon be surpassed. Until that happens, you want to charge as much as possible to immediately maximize your profits.
  • "But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities." - If you charge the maximum possible price to maximize your profits, competing companies will see how much money you are making and say, "Wow, we should do something like that too!" By maximizing your own profits, you are giving competing companies an incentive to quickly "catch up" and make a product with similar capabilities.
  • This implies that if, instead, you DON'T try to maximize profits and DON'T charge the highest possible price, competing companies will have less incentive to copy you. That will allow you to enjoy your technological advantage for a longer period of time and, according to the author, maximize your profits in the long run.

So most companies tend to try to maximize profits immediately by charging the highest possible price. According to the author, they would make more money in the long run by charging less than the greatest possible price.

Once you understand the argument, you can look back at the BF portions:

Quote:
Because technological advances tend to be quickly surpassed and companies want to make large profits while they still can...

This is the reason why companies tend to charge the highest possible price. In other words, this explains the appeal of a certain strategy (the strategy of charging the highest possible price). But the author does NOT endorse that strategy. The author argues that companies should charge LESS than the greatest possible price.

Looking at choice (D), the first BF portion is "a consideration raised in support of a strategy", but it is not a strategy that the argument endorses. (D) must be eliminated.

Choice (B) accurately describes the first BF portion as "a consideration raised to explain the appeal of a certain strategy"--not the strategy endorsed by the author, but the strategy that many companies employ (charging the highest possible price).

Quote:
But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities.

This explains how the strategy that many companies employ (charging the highest possible price) could backfire. So the first BF explains the appeal of the highest-price strategy, and the second BF portion explains why adopting that strategy might be a bad idea. In other words, the second BF portion "is a consideration raised to call into question the wisdom of adopting that strategy." Again, choice (B) is spot on.

As for choice (D), the "consideration" is the first BF portion. The second BF portion does not support the first BF portion, so (D) doesn't work.

(B) is the best answer.
_________________
GMAT/GRE tutor @ www.gmatninja.com (we're hiring!) | GMAT Club Verbal Expert | Instagram | Blog | Bad at PMs

Beginners' guides to GMAT verbal: RC | CR | SC

YouTube LIVE verbal webinars: Series 1: SC & CR Fundamentals | Series 2: Developing a Winning GMAT Mindset | Series 3: Word Problem Bootcamp + Next-Level SC & CR

SC articles & resources: How to go from great (760) to incredible (780) on GMAT SC | That "-ing" Word Probably Isn't a Verb | That "-ed" Word Might Not Be a Verb, Either | No-BS Guide to GMAT Idioms | "Being" is not the enemy | WTF is "that" doing in my sentence?

RC, CR, and other articles & resources: All GMAT Ninja articles on GMAT Club | Using LSAT for GMAT CR & RC |7 reasons why your actual GMAT scores don't match your practice test scores | How to get 4 additional "fake" GMAT Prep tests for $29.99 | Time management on verbal

SC & CR Questions of the Day (QOTDs), featuring expert explanations: All QOTDs | Subscribe via email | RSS

Need an expert reply? Hit the request verbal experts' reply button; be specific about your question, and tag @GMATNinja. Priority is always given to official GMAT questions.
Most Helpful Community Reply
Manager
Manager
avatar
Joined: 29 Jul 2009
Posts: 223
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post Updated on: 23 Aug 2009, 02:22
12
2
Whenever you see a boldface question you should start finding the premises, subconclusions and conclusion of the argument and asking yourself, do the premises support the conclusion?, does this premise support the author conclusion or a subconclusion that the author rejects?, and so on.

Premise: A product that represents a clear technological advance over competing products can generally command a high price.

Premise: Because technological advances tend to be quickly surpassed and companies want to make large profits while they still can,

subconclusion: many companies charge the greatest price for such a product

Counterpremise: But large profits on the new product will give competitors a strong incentive to quickly match the mew product’s capabilities

conclusion: the strategy to maximize overall profit from a new product is to charge less than the greatest possible price.

Before going to the answer choices, you may want to rephrase what could be the role of the bold-face portions.

technological advances tend to be quickly surpassed is used to support the subconclusion that many companies charge the greatest price for such a product. However, the author seems to not agree with this policy and recommends that a company charge less than the greatest possible price.

So a rephrase could be. The first is evidence to support a strategy contrary to the author conclusion.

A) This could sound OK with the rephrase. However, the strategy is not counterproductive because technological advances tend to be quickly surpassed but because large profits on the new product will give competitors a strong incentive to quickly match the new product’s capabilities
So A is out.

B) the subconclusion is contrary to the argument, so we can eliminate B.

C) this is close to the rephrase but for the part talking about the rejection. The first part supports the second part (subconclusion)
This is the correct answer choice.

D) the author does not reject the first bold face part.
D is out

E) here you should have clear that the goal of the author is to maximize the profits, as is stated in the conclusion "the strategy to maximize overall profit".

So the argument does not reject the goal that the boldfaces parts seek to achieve.

Originally posted by mikeCoolBoy on 23 Aug 2009, 01:38.
Last edited by mikeCoolBoy on 23 Aug 2009, 02:22, edited 1 time in total.
General Discussion
Manager
Manager
avatar
Joined: 04 Jun 2008
Posts: 179
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post 10 Jul 2009, 09:00
3
B imo

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.
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.
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. (it is actually based on that assumption.
D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.
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.
Intern
Intern
avatar
B
Joined: 12 Feb 2018
Posts: 8
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post 23 Mar 2019, 08:30
Please change the boldface parts. There is an error.
The bolface parts are "technological advances... quickly surpassed" and "many companies ... such a product"

sondenso
Manager
Manager
avatar
B
Joined: 03 Dec 2018
Posts: 169
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post 26 Mar 2019, 02:09
GMATNinja wrote:
Quote:
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 maximum possible price for 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.

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.

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.

D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.

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.

With any BF question, start with the conclusion, if possible: "the strategy to maximize overall profit from a new product is to charge less than the greatest possible price."

Now let's look at the argument WITHOUT worrying about the BF:

  • "A product that represents a clear technological advance over competing products can generally command a high price." - If your company comes up with a technologically advanced product, you can charge 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 maximum possible price for such a product." - You can charge a high price because your product has a technological advantage over competing products. You assume that whatever technological advantage you have will soon be surpassed. Until that happens, you want to charge as much as possible to immediately maximize your profits.
  • "But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities." - If you charge the maximum possible price to maximize your profits, competing companies will see how much money you are making and say, "Wow, we should do something like that too!" By maximizing your own profits, you are giving competing companies an incentive to quickly "catch up" and make a product with similar capabilities.
  • This implies that if, instead, you DON'T try to maximize profits and DON'T charge the highest possible price, competing companies will have less incentive to copy you. That will allow you to enjoy your technological advantage for a longer period of time and, according to the author, maximize your profits in the long run.

So most companies tend to try to maximize profits immediately by charging the highest possible price. According to the author, they would make more money in the long run by charging less than the greatest possible price.

Once you understand the argument, you can look back at the BF portions:

Quote:
Because technological advances tend to be quickly surpassed and companies want to make large profits while they still can...

This is the reason why companies tend to charge the highest possible price. In other words, this explains the appeal of a certain strategy (the strategy of charging the highest possible price). But the author does NOT endorse that strategy. The author argues that companies should charge LESS than the greatest possible price.

Looking at choice (D), the first BF portion is "a consideration raised in support of a strategy", but it is not a strategy that the argument endorses. (D) must be eliminated.

Choice (B) accurately describes the first BF portion as "a consideration raised to explain the appeal of a certain strategy"--not the strategy endorsed by the author, but the strategy that many companies employ (charging the highest possible price).

Quote:
But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities.

This explains how the strategy that many companies employ (charging the highest possible price) could backfire. So the first BF explains the appeal of the highest-price strategy, and the second BF portion explains why adopting that strategy might be a bad idea. In other words, the second BF portion "is a consideration raised to call into question the wisdom of adopting that strategy." Again, choice (B) is spot on.

As for choice (D), the "consideration" is the first BF portion. The second BF portion does not support the first BF portion, so (D) doesn't work.

(B) is the best answer.



Can You please explain why OptioN C is wrong? Isn't the author using the BF1 to prove a startegy (i.e Because technological). And BF2 weakens the strategy.
GMAT Club Verbal Expert
User avatar
D
Status: GMAT and GRE tutor
Joined: 13 Aug 2009
Posts: 2864
Location: United States
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post 01 May 2019, 02:10
2
mallya12 wrote:
Can You please explain why OptioN C is wrong? Isn't the author using the BF1 to prove a startegy (i.e Because technological). And BF2 weakens the strategy.

Quote:
(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.

The first part of (C) isn't terrible... I like the wording of (B) a bit better (the first BF portion is more of a consideration than an assumption, and it is used more to explain the strategy than to justify the strategy). But I wouldn't eliminate it right away.

But the second part of (C) is definitely wrong. The second BF portion is not mean to CAST DOUBT on the idea that 1) technological advances tend to be quickly surpassed or that 2) companies want to make large profits while they still can. The author doesn't doubt the validity of those two things themselves. Rather, the author doubts the wisdom of the strategy that can be explained by those two things.

The author is not trying to make us doubt the claims made in the first BF. Instead, the author argues that, in spite of those things, an alternative strategy would maximize overall profits.

I hope that helps!
_________________
GMAT/GRE tutor @ www.gmatninja.com (we're hiring!) | GMAT Club Verbal Expert | Instagram | Blog | Bad at PMs

Beginners' guides to GMAT verbal: RC | CR | SC

YouTube LIVE verbal webinars: Series 1: SC & CR Fundamentals | Series 2: Developing a Winning GMAT Mindset | Series 3: Word Problem Bootcamp + Next-Level SC & CR

SC articles & resources: How to go from great (760) to incredible (780) on GMAT SC | That "-ing" Word Probably Isn't a Verb | That "-ed" Word Might Not Be a Verb, Either | No-BS Guide to GMAT Idioms | "Being" is not the enemy | WTF is "that" doing in my sentence?

RC, CR, and other articles & resources: All GMAT Ninja articles on GMAT Club | Using LSAT for GMAT CR & RC |7 reasons why your actual GMAT scores don't match your practice test scores | How to get 4 additional "fake" GMAT Prep tests for $29.99 | Time management on verbal

SC & CR Questions of the Day (QOTDs), featuring expert explanations: All QOTDs | Subscribe via email | RSS

Need an expert reply? Hit the request verbal experts' reply button; be specific about your question, and tag @GMATNinja. Priority is always given to official GMAT questions.
Manager
Manager
avatar
S
Joined: 30 Sep 2017
Posts: 143
GMAT ToolKit User
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post 30 May 2019, 02:04
mallya12 wrote:
GMATNinja wrote:
Quote:
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 maximum possible price for 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.

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.

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.

D. The first is a consideration raised in support of a strategy the argument endorses; the second presents grounds in support of that consideration.

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.

With any BF question, start with the conclusion, if possible: "the strategy to maximize overall profit from a new product is to charge less than the greatest possible price."

Now let's look at the argument WITHOUT worrying about the BF:

  • "A product that represents a clear technological advance over competing products can generally command a high price." - If your company comes up with a technologically advanced product, you can charge 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 maximum possible price for such a product." - You can charge a high price because your product has a technological advantage over competing products. You assume that whatever technological advantage you have will soon be surpassed. Until that happens, you want to charge as much as possible to immediately maximize your profits.
  • "But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities." - If you charge the maximum possible price to maximize your profits, competing companies will see how much money you are making and say, "Wow, we should do something like that too!" By maximizing your own profits, you are giving competing companies an incentive to quickly "catch up" and make a product with similar capabilities.
  • This implies that if, instead, you DON'T try to maximize profits and DON'T charge the highest possible price, competing companies will have less incentive to copy you. That will allow you to enjoy your technological advantage for a longer period of time and, according to the author, maximize your profits in the long run.

So most companies tend to try to maximize profits immediately by charging the highest possible price. According to the author, they would make more money in the long run by charging less than the greatest possible price.

Once you understand the argument, you can look back at the BF portions:

Quote:
Because technological advances tend to be quickly surpassed and companies want to make large profits while they still can...

This is the reason why companies tend to charge the highest possible price. In other words, this explains the appeal of a certain strategy (the strategy of charging the highest possible price). But the author does NOT endorse that strategy. The author argues that companies should charge LESS than the greatest possible price.

Looking at choice (D), the first BF portion is "a consideration raised in support of a strategy", but it is not a strategy that the argument endorses. (D) must be eliminated.

Choice (B) accurately describes the first BF portion as "a consideration raised to explain the appeal of a certain strategy"--not the strategy endorsed by the author, but the strategy that many companies employ (charging the highest possible price).

Quote:
But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities.

This explains how the strategy that many companies employ (charging the highest possible price) could backfire. So the first BF explains the appeal of the highest-price strategy, and the second BF portion explains why adopting that strategy might be a bad idea. In other words, the second BF portion "is a consideration raised to call into question the wisdom of adopting that strategy." Again, choice (B) is spot on.

As for choice (D), the "consideration" is the first BF portion. The second BF portion does not support the first BF portion, so (D) doesn't work.

(B) is the best answer.



Can You please explain why OptioN C is wrong? Isn't the author using the BF1 to prove a startegy (i.e Because technological). And BF2 weakens the strategy.


Hi

Thanks for a detailed explanation. I'd like to probe into the problem a little more. Have you ever come across a BF problem to which the correct answer choice contains the word "assumption (as in A and C)? Do you mind sharing one? As assumptions are not typically explicit, I would not expect an answer say assumption although something that the assumption talks about is literally stated. However, I may be wrong.

Thank you Sir
GMAT Club Verbal Expert
User avatar
S
Joined: 20 Nov 2016
Posts: 260
Re: A product that represents a clear technological advance over competing  [#permalink]

Show Tags

New post 30 May 2019, 15:52
jawele wrote:
Hi

Thanks for a detailed explanation. I'd like to probe into the problem a little more. Have you ever come across a BF problem to which the correct answer choice contains the word "assumption (as in A and C)? Do you mind sharing one? As assumptions are not typically explicit, I would not expect an answer say assumption although something that the assumption talks about is literally stated. However, I may be wrong.

Thank you Sir

Good question! If anyone can think of a BF problem that has "assumption" in the correct answer choice, please let us know!
_________________
GMAT Club Bot
Re: A product that represents a clear technological advance over competing   [#permalink] 30 May 2019, 15:52
Display posts from previous: Sort by

A product that represents a clear technological advance over competing

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne