Recent years have brought minority-owned businesses in the United Stat

1. B

2. E

First, minority firms risk expanding too fast and overextending themselves financially, since most are small concerns and, unlike large businesses, they often need to make substantial investments in new plants, staff, equipment, and the like in order to perform work subcontracted to them.

3. C
Even in the best of circumstances, fierce competition from larger, more established companies makes it difficult for small concerns to broaden their customer bases:

4. C
Now Congress, in apparent agreement, has required by law that businesses awarded federal contracts of more than $500,000 do their best to find minority subcontractors and record their efforts to do so on forms filed with the government.

5. C
Third, a minority enterprise that secures the business of one large corporate customer often runs the danger of becoming—and remaining—dependent. Even in the best of circumstances, fierce competition from larger, more established companies makes it difficult for small concerns to broaden their customer bases: when such firms have nearly guaranteed orders from a single corporate benefactor, they may truly have to struggle against complacency arising from their current success.


6. E
Indeed, some federal and local agencies have gone so far as to set specific percentage goals for apportioning parts of public works contracts to minority enterprises.

7. E "same percentage"

8. C
The projected total of corporate contracts with minority businesses for the early 1980’s is estimated to be over 53 billion per year with no letup anticipated in the next decade.

i got 6 correct out of 8..

Can somebody please explain question number 4 and question number 7?
i couldnt even understand the question 4 and it's options and got B and the correct ans for question 7.

Also, can people share the time taken to do this ? i got all thes ans in 13:42 mins..i know its too late but had to face some disturbance in between. How long should we ideally take to finish this huge paggage?

Regards,
Krish..

I think q4 has a mix up. The passage clearly indicates that small businesses that cannot get bids turned to orders soon can face frustration.

"The world of corporate purchasing can be frustrating for small entrepreneurs who get requests for elaborate formal estimates and bids. Both consume valuable time and resources, and a small company’s efforts must soon result in orders, or both the morale and the financial health of the business will suffer."

However the actual questions talks about big enterprises --

"The passage suggests that the failure of a large business to have its bids for subcontracts result quickly in orders might cause it to:"

and choice A, represented in the passage is for small businesses.

choice B also appears in the passage.

I am guessing someone mixed up small business and large business in the question?

My take.

1. B

2. E

First, minority firms risk expanding too fast and overextending themselves financially, since most are small concerns and, unlike large businesses, they often need to make substantial investments in new plants, staff, equipment, and the like in order to perform work subcontracted to them.

3. C
Even in the best of circumstances, fierce competition from larger, more established companies makes it difficult for small concerns to broaden their customer bases:

4. C
Now Congress, in apparent agreement, has required by law that businesses awarded federal contracts of more than $500,000 do their best to find minority subcontractors and record their efforts to do so on forms filed with the government.

5. C
Third, a minority enterprise that secures the business of one large corporate customer often runs the danger of becoming—and remaining—dependent. Even in the best of circumstances, fierce competition from larger, more established companies makes it difficult for small concerns to broaden their customer bases: when such firms have nearly guaranteed orders from a single corporate benefactor, they may truly have to struggle against complacency arising from their current success.


6. E
Indeed, some federal and local agencies have gone so far as to set specific percentage goals for apportioning parts of public works contracts to minority enterprises.

7. E "same percentage"

8. C
The projected total of corporate contracts with minority businesses for the early 1980’s is estimated to be over 53 billion per year with no letup anticipated in the next decade.

I did this RC and scored 6/8. My concern is with Q4. As per my understanding the answer should be C. Can anyone help with the detailed explanation please. I tried a lot but could not figure out the answer A as mentioned in the OA. Pls help.

Text from passage - ... If, thereafter, their subcontracts are for some reason reduced, such firms can face potentially crippling fixed expenses. ....

What this means with respect to the question--
If the bids fail for small companies, they will incur fixed prices. You may imagine that a small company has rented a place for completing a large number of orders. Suddenly they have stopped receiving such orders, they still will have to pay the rent(fixed price) that is not the case with large companies as they usually have many rented place and multiple orders. So if one bid fails, sure, they will be annoyed or frustrated but will never we financially harmed unlike the smaller ones.

Great passage.Got all right but one, in 13 minutes. Loved this question 4 particularly- had tricked me too.

Hope it helps.

Could any expert help with question no 4?

Also, how long should we be taking to read this kind of passage?

I took 17 min to read and solve all the questions with 2 incorrect answer.

Is it too long for this kind of passage?

Adi93, I can help you with Q 8 as I also got that question wrong but found out the right answer.

The passage says "Corporate response appears to have been substantial. According to figures collected in 1977, the total of corporate contracts with minority businesses rose from $77 million in 1972 to $1.1 billion in 1977. The projected total of corporate contracts with minority businesses for the early 1980’s is estimated to be over 53 billion per year with no letup anticipated in the next decade."

8. The author would most likely agree with which of the following statements about corporate response to working with minority subcontractors?

(A) Annoyed by the proliferation of “front” organizations, corporations are likely to reduce their efforts to work with minority-owned subcontractors in the near future.
Although it is listed as on of the dangers for the minority businesses, no where in the passage it says the corporations are likely to reduce their efforts to work with minority-owned subcontractors.

(B) Although corporations showed considerable interest in working with minority businesses in the 1970’s, their aversion to government paperwork made them reluctant to pursue many government contracts.
Government seems to be quite helpful to MOB. It is quite unlikely that government, in any case, is going to make it difficult to do business for the large corporation with MOB.

(C) The significant response of corporations in the 1970’s is likely to be sustained and conceivably be increased throughout the 1980’s.
Yes, this is exactly what the excerpt says.

(D) Although corporations are eager to cooperate with minority-owned businesses, a shortage of capital in the 1970’s made substantial response impossible.
No where the shortage of capital is discussed in the passage.

(E) The enormous corporate response has all but eliminated the dangers of over-expansion that used to plague small minority-owned businesses.
All I could understand is that the over-expansion is the existing risk and it has not been eliminated.

I hope this helps.

Press Kudos, if it does

Answer --Because it referring to the year 190-72 whereas to prove that point unsubstantial the stats should've been between 1972 to 1980

P1 - Some efforts to improve minority groups status.
P2 - effects + risks
P3 - another risk
P4 - risk +1

1. The primary purpose of the passage is to

(A) present a commonplace idea and its inaccuracies
(B) describe a situation and its potential drawbacks - only this one is correctly describes the situation.
(C) propose a temporary solution to a problem
(D) analyze a frequent source of disagreement
(E) explore the implications of a finding

------------------------------------------
2. The passage supplies information that would answer which of the following questions?

By POE all other can be eliminated.

(E) What is one set of conditions under which a small business might find itself financially overextended? - this is given in P1.

-------------------------------------------
3. According to the passage, civil rights activists maintain that one disadvantage under which minority-owned businesses have traditionally had to labor is that they have

Civil rights activists have long argued that one of the principal reasons why Blacks, Hispanics, and other minority groups have difficulty establishing themselves in business is that they lack access to the sizable orders and subcontracts that are generated by large companies.

(C) not had sufficient opportunity to secure business created by large corporations
-----------------------------------------
4. The passage suggests that the failure of a large business to have its bids for subcontracts result quickly in orders might cause it to

The world of corporate purchasing can be frustrating for small entrepreneurs who get requests for elaborate formal estimates and bids.Both consume valuable time and resources, and a small company’s efforts must soon result in orders, or both the morale and the financial health of the business will suffer.

(A) experience frustration but not serious financial harm

-----------------------------------------------

5. The author implies that a minority-owned concern that does the greater part of its business with one large corporate customer should

(C) try to expand its customer base to avoid becoming dependent on the corporation

---------------------------------------------------
6. It can be inferred from the passage that, compared with the requirements of law, the percentage goals set by “some federal and local agencies” in highlighted text are

some federal and local agencies have gone so far as to set "specific" percentage goals for apportioning parts of public works contracts to minority enterprises.

(A) more popular with large corporations
(B) more specific - correct
(C) less controversial
(D) less expensive to enforce
(E) easier to comply with

-----------------------------------------------------

7. Which of the following, if true, would most weaken the author’s assertion that, in the 1970’s, corporate response to federal requirements (highlighted text) was substantial

Pre-think - We need to weaken this statement, Well this can be done if we prove that not substantial part of spending is given to minority.

(A) Corporate contracts with minority-owned businesses totaled $2 billion in 1979. - strenthening.

(B) Between 1970 and 1972, corporate contracts with minority-owned businesses declined by 25 percent. - but it might be still possible that spending increased.

(C) The figures collected in 1977 underrepresented the extent of corporate contracts with minority-owned businesses. - strenthening

(D) The estimate of corporate spending with minority-owned businesses in 1980 is approximately $10 million too high. - strenthening

(E) The $1.1 billion represented the same percentage of total corporate spending in 1977 as did $77 million in 1972. --- percentage spending is still the same. this can be termed as "substantial" for sure. - amswer.

------------------------------------------------------------
8. The passage most likely appeared in

(A) a business magazine - can be

(B) an encyclopedia of Black history to 1945 - 1977 stats cant be given in 1945.

(C) a dictionary of financial terms - i think passage is beyond that.

(D) a yearbook of business statistics - it is more than statistics.

(E) an accounting textbook - no for sure.

A is only option, though it is a bit wide.

-------------------------------------------------------

9. The author would most likely agree with which of the following statements about corporate response to working with minority subcontractors?

(A) Annoyed by the proliferation of “front” organizations, corporations are likely to reduce their efforts to work with minority-owned subcontractors in the near future. - no

(B) Although corporations showed considerable interest in working with minority businesses in the 1970’s, their aversion to government paperwork made them reluctant to pursue many government contracts. - no

(C) The significant response of corporations in the 1970’s is likely to be sustained and conceivably be increased throughout the 1980’s. - has to be. defined in P2

(D) Although corporations are eager to cooperate with minority-owned businesses, a shortage of capital in the 1970’s made substantial response impossible. - no

(E) The enormous corporate response has all but eliminated the dangers of over-expansion that used to plague small minority-owned businesses. - no

Passage Map:

1) New effort to promote minority-owned businesses carries significant risk
2) #s for showing progress. Risk 1: Fixed costs
3) Risk 2: “fronts” with White backing
4) Risk 3: Dependency on 1 company & competition from others

In Q9, E can also be true since the huge corporate response has undoubtedly helped small minority owned biz to expand but still the dangers associated with over expansion that used to affect these small businesses have not been eliminated.

4. The passage suggests that the failure of a large business to have its bids for subcontracts result quickly in orders might cause it to

(A) experience frustration but not serious financial harm

(B) face potentially crippling fixed expenses

(C) have to record its efforts on forms filed with the government

(D) increase its spending with minority subcontractors

(E) revise its procedure for making bids for federal contracts and subcontracts


Hi Experts / GMATNinja / GMATNinjaTwo / Skywalker18,

Can someone please distinguish between options A and B clearly?

tejanaraharisetti
The question is asking about what happens to large businesses not the minority businesses. option A answers the question asked.

GMATNinja

Would you mind taking a loot at this question? Is this passage really OG?

These are my thoughts on the question.
First we have to ascertain what pronoun "it" refers to in the question
it = large companies

Now let us come to this excerpt from the passage -
"First, minority firms risk expanding too fast and overextending themselves financially, since most are small concerns and, unlike large businesses, they often need to make substantial investments in new plants, staff, equipment, and the like in order to perform work subcontracted to them."

small firms over-extend financially unlike large businesses

This is essentially what option A is.

Also this part of the question in bold -
The passage suggests that the failure of a large business to have its bids for subcontracts result quickly in orders might cause it to
Well that might be a stretch to assume, and I understand. But its not completely irrational.

Furthermore, if we have ascertained that 'it' = large companies and look for the other options, we can easily eliminate b,D,E
Coming to C,
(C) have to record its efforts on forms filed with the government
This is true but not relevant for this particular question in hand.
I think from a PoE perspective, we also arrive at A.

Hope this helps.

AjiteshArun

Kindly help with
Q-4: The passage suggests that the failure of a large business to have its bids for subcontracts result quickly in orders might cause it to

Sadly, I could not figure the meaning of question itself.
Also, in the answer choice " experience frustration but not serious financial harm, the highlighted part is difficult to infer.

Hi experts, I am confused on question 4 after reading the other expert reply on this thread. It seems like a far stretch for an inference question on the GMAT to infer that large corporations may be frustrated. The passage simply states that large businesses do not face the same issues as small businesses/it is the small businesses that may be frustrated. What am I missing? Thank you!

Highlighting what part of the passage I am drawing on below:
"First, minority firms risk expanding too fast and overextending themselves financially, since most are small concerns and, unlike large businesses, they often need to make substantial investments in new plants, staff, equipment, and the like in order to perform work subcontracted to them...The world of corporate purchasing can be frustrating for small entrepreneurs who get requests for elaborate formal estimates and bids."