It is currently 19 Nov 2017, 00:14

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Three large companies and seven small companies currently

Author Message
TAGS:

### Hide Tags

Manager
Joined: 15 Jun 2007
Posts: 96

Kudos [?]: 170 [1], given: 0

Three large companies and seven small companies currently [#permalink]

### Show Tags

01 Aug 2007, 14:01
1
KUDOS
2
This post was
BOOKMARKED
00:00

Difficulty:

25% (medium)

Question Stats:

71% (01:18) correct 29% (01:29) wrong based on 2092 sessions

### HideShow timer Statistics

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.
[Reveal] Spoiler: OA

Kudos [?]: 170 [1], given: 0

Director
Joined: 11 Jun 2007
Posts: 909

Kudos [?]: 291 [0], given: 0

### Show Tags

01 Aug 2007, 14:22
stevegt wrote:
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.

Okay I think the answer is E. What is the OA?

Last edited by beckee529 on 01 Aug 2007, 14:27, edited 1 time in total.

Kudos [?]: 291 [0], given: 0

Intern
Joined: 12 Jul 2007
Posts: 13

Kudos [?]: 2 [0], given: 0

### Show Tags

01 Aug 2007, 14:24
I would say E

In the assumption question it is recommended to tie to the conclusion. Here, E states that small companies' specifications are different from government ones. Therefore, it would lead to the conclusion that all seven companies would have to change specifications if government decided to change them, which appears to be costly. Choice E fills in the gap between premise and conclusion.

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

Kudos [?]: 2 [0], given: 0

Manager
Joined: 08 Oct 2006
Posts: 211

Kudos [?]: 10 [0], given: 0

### Show Tags

01 Aug 2007, 15:04
E.

Kudos [?]: 10 [0], given: 0

Manager
Joined: 15 Jun 2007
Posts: 96

Kudos [?]: 170 [0], given: 0

### Show Tags

01 Aug 2007, 15:30
what's wrong with C?
IMO C acts like a defender of the argument and it could pass the nagtion test.

Kudos [?]: 170 [0], given: 0

Manager
Joined: 08 Jul 2007
Posts: 173

Kudos [?]: 11 [0], given: 0

### Show Tags

01 Aug 2007, 15:36
stevegt wrote:
what's wrong with C?
IMO C acts like a defender of the argument and it could pass the nagtion test.

I think it's because the argument is stating a hypothetical situation. "If the gov't regulates the industry..." If the lobbyists are able to dissuade the gov't, the hypothetical situation might still be true.

Kudos [?]: 11 [0], given: 0

Manager
Joined: 08 Oct 2006
Posts: 211

Kudos [?]: 10 [0], given: 0

### Show Tags

01 Aug 2007, 15:36
stevegt wrote:
what's wrong with C?
IMO C acts like a defender of the argument and it could pass the nagtion test.

C goes completely out of context. According to the statement, if the industry is regulated then seven compalnies will shut down. so E clearly provides assumption that they do make nothing of the required standards.
Hope it helps.

Kudos [?]: 10 [0], given: 0

Director
Joined: 29 Jul 2006
Posts: 851

Kudos [?]: 143 [0], given: 0

### Show Tags

01 Aug 2007, 16:43
Straight E.
C is outside the scope of this argument...What industry lobbists do is irrelevant...The argument is based on a period when the industry regulation is there.

Kudos [?]: 143 [0], given: 0

Senior Manager
Joined: 10 Mar 2008
Posts: 357

Kudos [?]: 390 [3], given: 0

Three large companies and seven small companies currently [#permalink]

### Show Tags

10 Oct 2008, 19:04
3
KUDOS
12
This post was
BOOKMARKED
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.

Last edited by hazelnut on 29 Apr 2017, 08:12, edited 2 times in total.

Kudos [?]: 390 [3], given: 0

VP
Joined: 30 Jun 2008
Posts: 1032

Kudos [?]: 729 [0], given: 1

Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

10 Oct 2008, 20:46
vksunder wrote:
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.

Is it E ? If we negate E, the argument that "none of the 7 small companies will remain in the business" will not hold good.
_________________

"You have to find it. No one else can find it for you." - Bjorn Borg

Kudos [?]: 729 [0], given: 1

Senior Manager
Joined: 10 Mar 2008
Posts: 357

Kudos [?]: 390 [0], given: 0

Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

11 Oct 2008, 15:19
OA - E. But could someplease explain what is wring with B.

Amitdgr - THe conclusion is also weakened if you negate B. What say?

Kudos [?]: 390 [0], given: 0

Manager
Joined: 12 May 2006
Posts: 175

Kudos [?]: 72 [0], given: 0

Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

11 Oct 2008, 19:36
From B we cannot conclude if small companies can afford that or not. It may cost more but it may be affordable.

Kudos [?]: 72 [0], given: 0

Intern
Joined: 16 Jan 2013
Posts: 2

Kudos [?]: 5 [0], given: 4

Location: India
Concentration: Operations, Finance
Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

28 Jun 2013, 01:01
vksunder wrote:
OA - E. But could someplease explain what is wring with B.

Amitdgr - THe conclusion is also weakened if you negate B. What say?

Cost is not a factor here and it is nowhere discussed in argument.

Kudos [?]: 5 [0], given: 4

Intern
Joined: 15 Mar 2013
Posts: 28

Kudos [?]: 30 [0], given: 13

Location: United States
Concentration: General Management, Strategy
GMAT Date: 08-07-2013
GPA: 3.33
WE: Consulting (Energy and Utilities)
Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

28 Jun 2013, 03:25
1
This post was
BOOKMARKED
vksunder wrote:
OA - E. But could someplease explain what is wring with B.

Amitdgr - THe conclusion is also weakened if you negate B. What say?

If you negate B, it would only mean that the cost of replacement is either same for both small and large companies or higher for larger companies. The affordability of replacement is being compared instead of the absolute cost of replacement.

Larger companies, assuming they are cash rich, can bear higher cost of replacement and would still see smaller companies exit the market since they couldn't bear even a lower replacement cost!

Kudos [?]: 30 [0], given: 13

Senior Manager
Joined: 10 Mar 2013
Posts: 268

Kudos [?]: 125 [0], given: 2405

GMAT 1: 620 Q44 V31
GMAT 2: 690 Q47 V37
GMAT 3: 610 Q47 V28
GMAT 4: 700 Q50 V34
GMAT 5: 700 Q49 V36
GMAT 6: 690 Q48 V35
GMAT 7: 750 Q49 V42
GMAT 8: 730 Q50 V39
Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

14 Apr 2014, 17:28
1
This post was
BOOKMARKED
three-large-companies-and-seven-small-companies-currently-71477.html

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 if new set of manufacturing specifications, only the three large companies will be able to remain in business.

Notes
10 companies make a product
Govt will place requirements on the industry.
7 companies can't afford any change
Only 3 big companies will stay in business

ASU:
7 companies can't combine
3 companies can afford the change
Other factors resulting from change won't shut the 3 companies down.

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.

Wrong:
If the government doesn't regulate the industry isn't an issue.

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.

Wrong (and a trap):
Conversion costs between companies isn't an issue.

C. Industry lobbyists will be unable to dissuade the government from regulating the industry.

Wrong:
Lobbyists are not part of argument.

D. Assembly of the product produced according to government manufacturing specifications would be more complex than current assembly procedures.

Wrong:

E. None of the seven small companies currently manufactures the product to a set of specifications that would match those the governm

Correct:
If the seven companies meet the governments requirements, then they wouldn't go out of business.

Kudos [?]: 125 [0], given: 2405

Intern
Joined: 24 Mar 2014
Posts: 4

Kudos [?]: 6 [0], given: 3

Location: India
Concentration: General Management, Technology
GMAT Date: 07-18-2014
GPA: 3.53
WE: Information Technology (Computer Software)
Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

28 Apr 2014, 09:25
It is clearly stated in premise - "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".

So my question is,-

1) In case of answer choice B - Only if the cost is higher then only we have the question of affordability, which the 7 small companies cannot bear. Thus B should be the answer.

2) In case of answer choice E - It is possible that small companies does not manufactures the product to a set of specifications that would match those the government. And 7 small companies might have to upgrade their production lines. Now the question should be if the upgradation is affordable or not for the smaller companies. If any smaller companies can bear the cost then they will remain in the competition.

The colclusion is - "the 7 small companies will be out of the competition."So when the small companies will be out of compitition only if they cannot afford the upgradation. And in the premise author already predicts that the 7 small companies will be out of the compition. Thus the author is sure that the small companies will have to upgrade. Thus I think E shouldn't be right.

Kudos [?]: 6 [0], given: 3

e-GMAT Representative
Joined: 02 Nov 2011
Posts: 2352

Kudos [?]: 9273 [5], given: 340

Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

07 May 2014, 09:25
5
KUDOS
Expert's post
3
This post was
BOOKMARKED
Hi

Let me share my two cents here.

I believe the fundamental point you missed in the argument was that none of the seven small companies can afford to convert their production lines to a new set of manufacturing specifications. The cost of conversion here is not important. Even if the cost of conversion is very low, the argument tells us that small companies can’t afford to convert.

DoNow wrote:
It is clearly stated in premise - "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".

So my question is,-

1) In case of answer choice B - Only if the cost is higher then only we have the question of affordability, which the 7 small companies cannot bear. Thus B should be the answer.

B tells us that Conversion of small companies would be more expensive than that of large. But whatever the cost of conversion is (higher or lower than that of big companies), we already know from the passage that none of the 7 small companies can afford the conversion. Thus, B doesn’t affect the argument and thus, can’t be the correct choice.

DoNow wrote:
2) In case of answer choice E - It is possible that small companies does not manufactures the product to a set of specifications that would match those the government. And 7 small companies might have to upgrade their production lines. Now the question should be if the upgradation is affordable or not for the smaller companies. If any smaller companies can bear the cost then they will remain in the competition.

The colclusion is - "the 7 small companies will be out of the competition."So when the small companies will be out of compitition only if they cannot afford the upgradation. And in the premise author already predicts that the 7 small companies will be out of the compition. Thus the author is sure that the small companies will have to upgrade. Thus I think E shouldn't be right.

The conclusion is that 7 small companies will be out of competition BECAUSE none of them can afford to convert their production lines to a new set of manufacturing specifications.

The author claims that small companies would go out of competition as they can’t afford. However, he doesn’t consider the scenario in which a small company might have already been working as per govt specification. In this case, the company doesn’t need to convert. Therefore, in this scenario, a small company may continue to exist. It means that the conclusion will not hold if option E is negated. Thus, option E is a required assumption and hence, the correct answer.

Does this help?

Dolly
_________________

| '4 out of Top 5' Instructors on gmatclub | 70 point improvement guarantee | www.e-gmat.com

Kudos [?]: 9273 [5], given: 340

Manager
Joined: 24 Jun 2013
Posts: 61

Kudos [?]: 11 [0], given: 49

Schools: ISB '16, NUS '15
Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

20 May 2014, 07:40
Hi Chiranjeev,

Keeping the conclusion in mind ,which is Three large companies will remain in business and seven won't because small company won't be able to afford to convert the production line as per new specification issued by govt.

just want to check how to negate the option A.

My attempt,

All of the three large companies will go out of business if the government does regulate
the manufacture of the product.

and its like negating the premise. based on which i eliminated this option.

Is my negation technique is right ?

Kudos [?]: 11 [0], given: 49

Intern
Joined: 11 Nov 2013
Posts: 32

Kudos [?]: 24 [0], given: 7

Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

20 May 2014, 10:20
Nitinaka19 wrote:
Hi Chiranjeev,

Keeping the conclusion in mind ,which is Three large companies will remain in business and seven won't because small company won't be able to afford to convert the production line as per new specification issued by govt.

just want to check how to negate the option A.

My attempt,

All of the three large companies will go out of business if the government does regulate
the manufacture of the product.

and its like negating the premise. based on which i eliminated this option.

Is my negation technique is right ?

Hey Nitin

My bit on this-

I'm afraid to say but your negation of A doesn't seem right to me. Negation of 'none' means that 'none is not true' . 'None of the companies' means 'zero companies'. How would you say that 'companies' count is not zero'?

You can say that at least one of the companies will go out of business...

A talks about the scenario in which government does not regulate the manufacture of the product; however the argument is concerned with the scenario in which it does. Interestingly in your negation, you have mentioned the correct scenario but that's not what answer choice says. It seems you misread the option.

A. None of the three large companies will go out of business if the government does not regulate the manufacture of the product.

Argument: Three large companies and seven small companies currently manufacture a product with potential military applications. If the government regulates the industry, ...

Thus, as option A talks about a situation that is not related to the discussion in the argument, this choice is irrelevant.

Does it help?
Dolly

Last edited by DollyS on 20 May 2014, 10:45, edited 1 time in total.

Kudos [?]: 24 [0], given: 7

Manager
Joined: 24 Jun 2013
Posts: 61

Kudos [?]: 11 [0], given: 49

Schools: ISB '16, NUS '15
Re: Three large companies and seven small companies currently [#permalink]

### Show Tags

20 May 2014, 10:44
Hi Dolly

Thanks for your response, First of all i totally agree with your point that we are discussing about what will happen when govt does regulate , So discussing about what will happen when govt does not regulate would be out of scope.

Now coming to the negation of option A

what i suppose where i made a mistake is , whenever we have this kind of sentence structure, Will should not negate the modifier part and in this case it is if the govt..... product.

So the correct negation would be

None (SOME or At least one) of the three large companies will go out of business if the government does not regulate the manufacture of the product.

Bracket part is the negated word.

Yes it surely helped me.

Thanks

Kudos [?]: 11 [0], given: 49

Re: Three large companies and seven small companies currently   [#permalink] 20 May 2014, 10:44

Go to page    1   2    Next  [ 29 posts ]

Display posts from previous: Sort by