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Here is the full breakdown for Question #1 in this set:

The key behind a "Mimic" question like this is to carefully determine the "Big Picture" associated with the question and then "Nitpick" answers, eliminating answers that don't fit. The question asks for what situation the author "would most likely support government intervention and regulation."

In the last paragraph the author talks about the "more reasonable view" (an indication that the author agrees with this perspective.) This view argues that regulation is needed in cases when big corporations fail to pass on to the public the savings associated with economies of scale. So, our job is to find the answer that demonstrates this situation.

Answer choice (A) does exactly that. Patent protection creates a type of legalized monopoly, where only a specific company has the right to sell a particular product. The word "because" in this answer choice is crucial. It indicates a cause-effect relationship: the reason why the drug is so expensive is because of the patent protection. Thus, other hypothetical reasons for expensive drugs (such as production costs, R&D, etc.) are not relevant here. Since the drug cannot be afforded by the general public "because" of the patent protection, the public is not seeing the benefits of the economies of scale. It would be in the public interest to regulate this specific, monopolistic situation. Answer choice (A) is a perfect fit.

Answer choice (B) is a classic trap answer. It specifically states that a company has a "monopoly" for its most important product. However, the author argues that regulation is needed when the cost savings associated with monopolies are not passed on to the general public. Since (B) states that "prices have gone down," this is not the type of monopoly that needs to be regulated. Eliminate (B).

Likewise, (C) states that collusion between companies has kept prices low for a specific product. This is in the public interest, so (C) can be equally eliminated.

While some people may pick (D) because it specifically mentions one of the benefits associated with economies of scale (namely "cheaper production") while never saying that these cost savings are passed on to the public. However, not mentioning something doesn't mean it doesn't happen. (I call this trap "Lack of Evidence is Not Evidence" in my classes.) In order for answer choice (D) to describe a situation where regulation is needed, the reader must assume that the savings associated with cheaper production are retained by the companies and not passed on to the public. But we don't know this. There is no information on whether those savings are passed on or retained. With Critical Reasoning questions, correct answers should be sufficient without needing extra, unstated assumptions.

Answer choice (E) is very similar to (B). While it describes a virtual monopoly, it also mentions that the petroleum firm has used its market dominance to "greatly reduce domestic gas prices." Since the general public benefits from this type of monopoly, the author would not argue that such a type of monopoly needs to be regulated.

To summarize: three of the five answer choices (B, C, and E) indicate that prices have gone down due to the business practices mentioned. Because this benefits the public, these answers can be easily eliminated. (D) requires an extra assumption not explicitly stated in the problem in order to work. This leaves only answer choice (A) -- a situation where there is clear monopolistic price gouging.

Answer choice (A) is the correct answer.