There is widespread belief that the emergence of giant industries has

Question

New Project RC Butler 2019  -  Practice 2 RC Passages Everyday   
Passage # 314, Date : 06-Sep-2019
 This post is a part of New Project RC Butler 2019 .  Click here for Details

There is widespread belief that the emergence of giant industries has been accompanied by an equivalent surge in industrial research. A recent study of important inventions made since the turn of the century reveals that more than half were the product of individual inventors working alone, independent of organized industrial research. While industrial laboratories contributed such important products as nylon and transistors, independent inventors developed air conditioning, the automatic transmission, the jet engine, the helicopter, insulin, and streptomycin. Still other inventions, such as stainless steel, television, silicones, and Plexiglas were developed through the combined efforts of individuals and laboratory teams.

Despite these finding, we are urged to support monopolistic power on the grounds that such power creates an environment supportive of innovation. We are told that the independent inventor, along with the small firm, cannot afford to undertake the important research needed to improve our standard of living while protecting our diminishing resources; that only the giant corporation or conglomerate, with its prodigious assets, can afford the kind of expenditures that produce the technological advances vital to economic progress. But when we examine expenditures for research, we find that of the more than $35 billion spent each year in this country, almost two-thirds is spent by the federal government. More than half of this government expenditure is funneled into military research and product development, accounting for the enormous increase in spending in such industries as nuclear energy, aircraft, missiles, and electronics. There are those who consider it questionable that these defense-linked research projects will either improve our standard of living or do much to protect our diminishing resources.

Recent history has demonstrated that we may have to alter our longstanding conception of the process actuated by competition. The price variable, once perceived as the dominant aspect of the process, is now subordinate to the competition of the new product, the new business structure, and the new technology. While it can be assumed that in a highly competitive industry not dominated by single corporation, investment in innovation—a risky and expensive budget item—might meet resistance from management and stockholders concerned about cost-cutting, efficient organization, and large advertising budgets, it would be an egregious error to equate the monopolistic producer with bountiful expenditures on research. Large-scale enterprises tend to operate more comfortably in stable and secure circumstances, and their managerial bureaucracies tend to promote the status quo and resist the threat implicit in change. Moreover, in some cases, industrial giants faced with little or no competition seek to avoid the capital loss resulting from obsolescence by deliberately obstructing technological progress. By contrast, small firms undeterred by large investments in plant and capital equipment often aggressively pursue new techniques and new products, investing in innovation in order to expand their market shares.

The conglomerates are not, however, completely except from strong competitive pressures. There are instances in which they too must compete with another industrial Goliath, and then their weapons may include large expenditures for innovation.   1 
 1. The primary purpose of the passage is to

A. Advocate an increase in government support of organized industrial research
B. Point out a common misconception about the relationship between the extent of industrial research and the growth of monopolistic power in industry
C. Describe the inadequacies of small firms in dealing with the important matter of research and innovation
D. Show that America’s strength depends upon individual ingenuity and resourcefulness
E. Encourage free-market competition among industrial giants

2 
 2. According to the passage, important inventions of the twentieth century

A. Were produced largely as a result of governmental support for military weapons research and development
B. Came primarily from the huge laboratories of monopolistic industries
C. Were produced at least as frequently by independent inventors as by research teams
D. Have greater impact on smaller firms than on conglomerates
E. Sometimes adversely affect our standard of living and diminish our natural resources

3 
 3. Which of the following best describes the organization of the second paragraph of the passage?

A. Expenditures for various aspects of research are listed.
B. Reasons for supporting monopolistic power are given and then questioned.
C. Arguments are presented for minimizing competitive bidding for research.
D. Resources necessary for research are defined.
E. Costs for varied aspects of military research are questioned.

4 
 4. It can be inferred from the passage that the author

A. Has little confidence in the ability of monopolistic industry to produce the important inventions of the future
B. Would rather see the federal government spend money on social services than on the defense establishment
C. Favors a conservative approach to innovation and places trust in conglomerates to provide efficient production
D. Feels that price should still be the dominant variable in the competitive process
E. Believes that excessive competition is a deterrent to innovation

5 
 5. The passage contains information that answers which of the following questions?

I.  What portion of the research dollar in this country is spent each year by the federal government?
 II.  Under what circumstances is an industrial giant likely to invest heavily in innovation?
 III.  Why might a monopolistic producer want to suppress an innovation?

A. I only
B. II only
C. I and II only
D. II and III only
E. I, II, and III

6 
 6. With which of the following statements would the author of the passage be most likely to agree?

A. Monopolistic power creates an environment supportive of innovation.
B. Governmental expenditure for military research will do much to protect our dwindling resources.
C. Industrial giants, with their managerial bureaucracies, respond more quickly to technological change than smaller firms do.
D. Firms with a small share of the market aggressively pursue innovations because they are not locked into old capital equipment.
E. The independent inventor cannot afford to undertake the research needed to improve our standard of living.

7 
 7. Which of the following proposals best responds to the issues raised by the author?

A. Governmental restraints on monopolies should be lifted, and government funding should be made available to large corporations wishing to engage in research.
B. Governmental restraints on monopolies should be tightened, and government funding should be made available to small corporations and independent individuals wishing to engage in research.
C. Governmental restraints on monopolies should be tightened, and no government funding should be provided to any corporations or individuals wishing to engage in research.
D. The amount the government spends on military research should be decreased, and the amount it spends to improved the standard of living should be increased.
E. Governmental restraints on monopolies should be lifted, and no government funding should be provided to any corporations or individuals wishing to engage in research.

8 
 8. Which of the following, if true, would most weaken the author’s main point?

A. In the last decade, conglomerates have significantly increased their research budgets for defense technology.
B. Tax restructuring permits smaller firms to write off a larger percentage of profits against research.
C. A ten-year study of the extent of resources devoted to research by smaller enterprises reveals a steady decline.
D. Military research is being directed more extensively to space technology than to short-range missiles.
E. Competition from foreign industries has increased the cost of labor and materials.

Shubhampanda · Answer

4 & 5 . Explanation please

Alpha14 · Answer

SajjadAhmad  Q2,4,8 ? explanation pls

Sajjad1994 · Answer

Please provide your thoughts on question #4 and 5

Question #4

Read these lines in first para

"A recent study of important inventions made since the turn of the century reveals that more than half were the product of individual inventors working alone, independent of organized industrial research."

Then author questions the effectiveness of monopolistic giant firms by these lines

"There are those who consider it questionable that these defense-linked research projects will either improve our standard of living or do much to protect our diminishing resources."

This leads to Answer: A

Question #5

I.  What portion of the research dollar in this country is spent each year by the federal government?

Mentioned in 2nd para as

"we find that of the more than $35 billion spent each year in this country, almost two-thirds is spent by the federal government."

II.  Under what circumstances is an industrial giant likely to invest heavily in innovation?

Mentioned in 2nd para as

"Despite these finding, we are urged to support monopolistic power on the grounds that such power creates an environment supportive of innovation. We are told that the independent inventor, along with the small firm, cannot afford to undertake the important research needed to improve our standard of living while protecting our diminishing resources; that only the giant corporation or conglomerate, with its prodigious assets, can afford"

III.  Why might a monopolistic producer want to suppress an innovation?

Mentioned in third para as

"Moreover, in some cases, industrial giants faced with little or no competition seek to avoid the capital loss resulting from obsolescence  by deliberately obstructing technological progress."

It leads us to answer: E

Does this all make sense?

Sajjad1994 · Answer

Question #2

read these lines in first para

"A recent study of important inventions made since the turn of the century reveals that more than half were the product of individual inventors working alone, independent of organized industrial research"

This leads us to answer: C

Question #4

read my below reply

https://gmatclub.com/forum/there-is-wid ... l#p2362199

Question #8

Truly hard one this is.

C. A ten-year study of the extent of resources devoted to research by smaller enterprises reveals a steady decline.

It means smaller firms performance is now declining with each $ they spent in research and innovation.

Lets try to understand with an example

A smaller firm was costing a million$ to invent 10 items before but now after investing a million$ its output has been declined and it is inventing only 7 or 8 items, in other words less than 10 items it was inventing before.

So if smaller firm's performance is declining they are not entitled to get subsidies (Tax concessions capital etc.) by government to do so they must show better performance than before. So it weakens authors' main point to support smaller firms.

Answer: C

Does this all make sense?

Alpha14

SajjadAhmad Q2,4,8 ? explanation pls

Alpha14 · Answer

SajjadAhmad  How does turn of the century tells us that it is the twentieth century ?

Sajjad1994 · Answer

Sorry but your question is not understandable. Please mention question# or answer option you are referring to.

Thanks

Alpha14 · Answer

SajjadAhmad  I am referring to Ques 2

Sajjad1994 · Answer

Now read it again and understand its meaning.

A  recent  study of important inventions made  since the turn of the century  (It means after a century (100 years) a study has been conducted) reveals that  more than half were the product  of individual inventors working alone, independent of organized industrial research"

shanky315 · Answer

Hi All,
Ideally how much time should we take to complete such long passage? I took close to 11 minutes, got all the answers correct.
Thanks

Sajjad1994 · Answer

Wow

You are super fast i think, 15-16 minutes is a good time for such a passage.

Beqa · Answer

For 3-4 question passage that we usually face in the real GMAT exam,  2 mins * the number of questions  is the proper time. However, for these practice passages,  3-4 mins for initial reading + 1 min for each question  is recommended!

jaisonsunny77 · Answer

1. The primary purpose of the passage is to

It is asserted that we must support 'monopolistic power' since such powers tend to create the ''right'' environment for innovation. But the passage explains why this assertion is actually a misconception: the passage explains why monopolies tend to resist innovation in the first place. the third paragraph even goes on to cite cost cutting and managerial bureaucracy as some of the reasons why large conglomerates (aka monopolistic powers) resist innovation (change) in the first place. Only (B) describes this thought perfectly.

B. Point out a common misconception about the relationship between the extent of industrial research and the growth of monopolistic power in industry

Hence,   (B) is the right answer choice.  
 
  2. According to the passage, important inventions of the twentieth century 
 
The first paragraph goes on to describe some important contributions from both the individual inventors and the researchers using industrial laboratories. So, we can reasonably infer that both individual inventors and researchers played important roles in the development of important inventions in the twentieth century. Only (C) has this thought.

C. Were produced at least as frequently by independent inventors as by research teams

Hence,   (C) is the right answer choice.  
 
  3. Which of the following best describes the organization of the second paragraph of the passage? 
 
the second paragraph is constructed to question the assertion that urges support for monopolistic power. This is exactly what we have in (B)

B. Reasons for supporting monopolistic power are given and then questioned.

Hence,   (B) is the right answer choice.   
  
4. It can be inferred from the passage that the author 
 
The second paragraph is constructed to question the assertion that urges support for monopolistic power. The third paragraph goes on to explain why these monopolistic cultures tend to resist innovation in the first place. The final paragraph implies that only when forced with the threat of competition, large conglomerates (companies that enjoy monopoly power) tend to invest in innovation. Hence, we can reasonably infer that 
throughout the passage, the author maintains a tone of doubt towards the ''monopolistic culture'' and its capability to contribute to important inventions. (A) reflects this thought perfectly.

A. Has little confidence in the ability of monopolistic industry to produce the important inventions of the future

Hence,   (A) is the right answer choice.  
 
  5. The passage contains information that answers which of the following questions?

I. What portion of the research dollar in this country is spent each year by the federal government? - mentioned towards the middle of paragraph II (of the more than $35 billion spent each year in this country, almost two-thirds is spent by the federal government.)
II. Under what circumstances is an industrial giant likely to invest heavily in innovation? - the final paragraph makes this assertion. 
III. Why might a monopolistic producer want to suppress an innovation? - In paragraph III, cost cutting and managerial bureaucracy have been cited as reasons why a monopolistic producer want to suppress an innovation.

Hence, the passage contains information to answer all three questions. Therefore,   the right answer to the main question is (E).

6. With which of the following statements would the author of the passage be most likely to agree? 
 
In paragraph III, it is mentioned that "industrial giants faced ... seek to avoid the capital loss resulting from obsolescence by deliberately obstructing technological progress. By contrast, small firms undeterred by large investments in plant and capital equipment often aggressively pursue new techniques and new products,...". From this, we can reasonably infer that the author would most likely agree with (D).

(D). Firms with a small share of the market aggressively pursue innovations because they are not locked into old capital equipment.
Hence,   (D) is the right answer choice.   
  
7. Which of the following proposals best responds to the issues raised by the author? 
 
Since the author maintains a tone of doubt towards the ''monopolistic culture'' and its capability to contribute to important inventions and has a supportive stance towards small firms and independent individuals wishing to engage in research, only (B) would represent the main point of the author.

B. Governmental restraints on monopolies should be tightened, and government funding should be made available to small corporations and independent individuals wishing to engage in research.

Hence,   (B) is the right answer choice.

8. Which of the following, if true, would most weaken the author’s main point?
 
 The authors main point lies towards the end of the third paragraph: " By contrast, small firms undeterred by large investments ....aggressively......investing in innovation in order to expand their market shares." (C) directly weakens this assertion. 
C. A ten-year study of the extent of resources devoted to research by smaller enterprises reveals a steady decline.

Hence,   (C) is the right answer choice.

VerbalBot · Answer

Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

There is widespread belief that the emergence of giant industries has

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Reading Comprehension (RC) Questions

There is widespread belief that the emergence of giant industries has

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards