Q38: Three large companies and seven small companies

Question

Q38:
Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere. In this case, therefore, since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business.

Which of the following is an assumption on which the author’s argument relies?

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.
B. It would cost more to convert the production lines of the small companies to a new set of manufacturing specifications than it would to convert the production lines of the large companies.
C. Industry lobbyists will be unable to dissuade the government from regulating the industry.
D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures. 
E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the government would institute if the industry were to be regulated.

grad_mba · Answer

go with E

nervousgmat · Answer

Yeah, another E here...

nehanishika · Answer

me also E

vineetgupta · Answer

Negate E and the argument falls apart...E it is.

mr_sarn · Answer

Clearly E.

jet1445 · Answer

but the OA is B, could someone explain to me why?

buzzgaurav · Answer

B is the correct answer.

E simply states that the seven companies do not currently manufacture the product as per the guidelines that would be laid down by the government.

If you read the question carefully:
 "  In this case, therefore, since  none of the seven small companies  can afford  to convert  their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business . "

B correctly addresses the   cost   factor

ywilfred · Answer

I think E does address the cost factor.

If E wasn't true, there there's no extra cost involved for the smaller companies, so it would not be true that only the three large companies will be able to remain in business.

vc019 · Answer

Fact :
- Three large companies and seven small companies currently manufacture a product with potential military applications
- If the government regulates the industry, it will institute a single set of manufacturing specifications to which all ten companies will have to adhere
 Conclusion :
- Since none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications, only the three large companies will be able to remain in business

Now let's look at the options
A -  Eliminate  - Is an assumption but that does not endorse the conclusion.
B -  Correct  - Is an assumption which endorses the conclusion.
C -  Eliminate  - No evidence in the question.
D -  Eliminate  - No evidence in the question.
E -  Eliminate  - No evidence in the question.

 Hence B is the answer.

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Q38: Three large companies and seven small companies

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