Products that are full of novel features generally have higher profit

Products that are full of novel features generally have higher profit margins than simpler products. Because the stock market rewards higher returns on research and development and a company’s decisions are driven by stock prices, incumbents in any industry invest their research and development efforts on making products more complex, leaving the products that provide the lowest profit margins to competitors. However, such a strategy can easily backfire since it allows competitors to build competence and slowly come after those high margin products. Therefore, the best strategy for an incumbent is to invest to maintain leading positions in both low margin and high margin products.


In the above argument, the two boldface portions play which of the following roles?

(A) The first is a belief that the argument does not dispute; the second is a conclusion that supports another conclusion in the argument.
(B) The first is part of a reason for an observed behavior; the second is the main conclusion of the argument.
(C) The first is part of a reason for an observed behavior; the second is a belief that supports the position taken by the author.
(D) The first is an observation that the argument does not dispute; the second is a fact that supports the main conclusion of the argument.
(E) The first is a belief used to explain an observed behavior; the second is an intermediate conclusion that supports the main conclusion of the argument.