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# Companies in the country of Kollontay can sell semiconductor

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Re: Companies in the country of Kollontay can sell semiconductor [#permalink]
jlgdr wrote:
Companies in the country of Kollontay can sell semiconductors in the country of Valdivia at a price that is below the cost to Valdivian companies of producing them. To help those Valdivian companies, the Valdivian legislature plans to set a minimum selling price in Valdivia for semiconductors manufactured in Kollontay that is ten percent greater than the average production costs for companies in Valdivia.

Which of the following, if true, most seriously threatens the success of the plan?

(A) The annual rate of inflation in Kollontay is expected to exceed ten percent within the next year.
(B) Valdivia is not the only country where companies in Kollontay currently sell semiconductors.
(C) Some Valdivian companies that sell semiconductors have announced that they plan to decrease their price for semiconductors.
(D) The government of Kollontoy will also set a minimum price for selling semiconductors in that country.
(E) Emerging companies in countries other than Kollontay will still be able to sell semiconductors in Valdivia at a price below the cost to Valdivian companies to manufacture them.

(A) The annual rate of inflation in Kollontay is expected to exceed ten percent within the next year. Incorrect. out of scope.
(B) Valdivia is not the only country where companies in Kollontay currently sell semiconductors. Incorrect. Out of scope.
(C) Some Valdivian companies that sell semiconductors have announced that they plan to decrease their price for semiconductors. Incorrect. Strengthens the argument instead of threatening it.
(D) The government of Kollontoy will also set a minimum price for selling semiconductors in that country. Incorrect. Out of scope.
(E) Emerging companies in countries other than Kollontay will still be able to sell semiconductors in Valdivia at a price below the cost to Valdivian companies to manufacture them. Correct. If this happens Valdivian companies will still face the problem of other players selling semiconductors at a price lower than that of Valdivian companies which does not solve the purpose of helping Valdivian companies.
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Re: Companies in the country of Kollontay can sell semiconductor [#permalink]
E it is. E simply brings forth the notion that competition from other players - new ones are as threatening as the old ones
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Re: Companies in the country of Kollontay can sell semiconductor [#permalink]
1
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Hi. Can somebody please explain me the argument itself? Why would the V government raise the price of K product if it wants to help its companies? that is ten percent greater than the average production cost for companies in Valdivia
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Re: Companies in the country of Kollontay can sell semiconductor [#permalink]
Understanding the argument -
Companies in the country of Kollontay can sell semiconductors in the country of Valdivia at a price that is below the cost to Valdivian companies of producing them. - Fact
To help those Valdivian companies, the Valdivian legislature plans to set a minimum selling price in Valdivia for semiconductors manufactured in Kollontay that is ten percent greater than the average production costs for companies in Valdivia. - Plan to deal with the problem of other companies selling below the cost.

Option Elimination - Weaken

(A) The annual rate of inflation in Kollontay is expected to exceed ten percent within the next year. - out of the scope of the argument. Our scope is limited to the plan in Valdivia.

(B) Valdivia is not the only country where companies in Kollontay currently sell semiconductors. - There may be other countries, but that is not in the scope of our argument.

(C) Some Valdivian companies that sell semiconductors have announced that they plan to decrease their price for semiconductors. - Some can be at least 2. It's good that 2 Valdivian companies can sell at a lower price, but the plan in the argument is still valid for, say, 98% of the remaining companies. Moreover, this is another plan that is outside of the scope of the plan mentioned in the argument.

(D) The government of Kollontoy will also set a minimum price for selling semiconductors in that country. - Out of scope. Our scope is limited to the plan in Valdivia and not to the repercussions it'll have outside Valdivia.

(E) Emerging companies in countries other than Kollontay will still be able to sell semiconductors in Valdivia at a price below the cost to Valdivian companies to manufacture them. - ok.
Re: Companies in the country of Kollontay can sell semiconductor [#permalink]
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