V07-11

Question

United States manufacturers currently produce most of the world's solar-power generators--most of which are exported to Europe. However, European manufacturers are emerging and probably will ultimately capture much of the European market. The United States government is funding initiatives intended to encourage use of solar power within the United States. If these initiatives succeed in increasing the demand for solar-power generators in the United States, United States manufacturers will probably maintain significant production levels, since __________.
 
Which of the following most logically completes the argument?

A. some United States manufacturers have been substantially increasing their output over the last several years
B. the efficiency of solar-power generators in converting energy from the Sun into electric power is not improving as fast as it once did
C. just as European manufacturers enjoy certain competitive advantages in Europe, so do United States manufacturers in the United States
D. European governments are currently undertaking initiatives to stimulate the use of solar power within Europe
E. the current market for solar-power generators in the United States is very limited

sayantanc2k · Accepted Answer

The correct option should explain why  United States manufacturers will probably maintain significant production levels . The reason for maintaining production levels cannot be that the current market for solar-power generators in the United States is very limited. Hence option E is wrong.

Bunuel · Answer

Official Solution:

United States manufacturers currently produce most of the world's solar-power generators--most of which are exported to Europe. However, European manufacturers are emerging and probably will ultimately capture much of the European market. The United States government is funding initiatives intended to encourage use of solar power within the United States. If these initiatives succeed in increasing the demand for solar-power generators in the United States, United States manufacturers will probably maintain significant production levels, since __________.
 
Which of the following most logically completes the argument?

A. some United States manufacturers have been substantially increasing their output over the last several years
B. the efficiency of solar-power generators in converting energy from the Sun into electric power is not improving as fast as it once did
C. just as European manufacturers enjoy certain competitive advantages in Europe, so do United States manufacturers in the United States
D. European governments are currently undertaking initiatives to stimulate the use of solar power within Europe
E. the current market for solar-power generators in the United States is very limited

Fact 1:  United States manufacturers currently produce most of the world's solar-power generators--most of which are exported to Europe. 
 
 Fact 2:  However, European manufacturers are emerging and probably will ultimately capture much of the European market. (Assumption – It will reduce the US exports to Europe)
 
 Fact 3:  The United States government is funding initiatives intended to encourage use of solar power within the United States.
 
 Conclusion : If these initiatives succeed in increasing the demand for solar-power generators in the United States, United States manufacturers will probably maintain significant production levels, ...
 
We can see in the 3rd fact that Author has stated that the US Govt has taken initiative to boost up sales of solar power in the US. This clearly indicates that the demand for solar power generators is currently not high enough to accommodate the produce of US generator manufacturers. (This is what Choice E says) 
 
Then Author has concluded that if govt's initiatives succeed in increasing the demand for solar power generators, US manufacturers will probably maintain significant production level. Here the author has assumed that the increased demand of solar power gensets will be fulfilled by supplies of US manufacturers. So next logical premise would eliminate the possibility of fulfillment of increased demand by sources other than US manufacturers. 
 
Choice C does that job and hence is the correct answer.

Answer: C

AndriyBondarenko · Answer

Why not E? The producers can maintain the production level in case the loss of the European market share is offset by the increased share within USA, which was low and now is planned to get boosted. Where is my mistake?

vivekgautam1 · Answer

I am not sure, if the answer at this point of time will help you, but here's my logic:

The line -  "If these initiatives succeed in increasing the demand for solar-power generators in the United States"  itself indicates that the currently United States has very limited market for solar generators (and that's the reason government trying to promote it by funding initiatives).

So, like Bunuel mentioned - manufacturers in United States will be able to maintain their production level only if the demand for solar generators is not met by any external source.

I hope this helps.

maitysourav · Answer

why option E is not correct.

Atbr1602 · Answer

Because current market is limited --> so "when these initiatives succeed in increasing the demand" --> the result is "manufacturers will probably maintain significant production levels", can anyone help explain why this logic is wrong?

Thank you!

Thank you!

sayantanc2k · Answer

I am not very clear what your query is. Are you asking why D cannot be the answer?

D does not indicate a reason that American manufacturers will be able compete against the European manufacturers. The passage is about why the American manufacturers would be able to maintain production even when European manufacturers emerge. Increasing the demand in Europe may result in more sales by the European companies in Europe, but this outcome does not provide a reason that the European companies would not capture the markets of the American manufacturers.

siddharthnes · Answer

I think this is a  poor-quality  question and the explanation isn't clear enough, please elaborate.

umg · Answer

Here is another Reason why E is wrong..

E says - the current market for solar-power generators in the United States is very limited.

So, the initiatives by govt. will expand the market and the US companies will not have to downsize their Production due to loss in sales in Europe. BUT, what if the European Manufacturers start focusing on the US markets as well? Then the conclusion drawn by the author would become debatable. C fills in this gap perfectly. If the market in US expands, the US companies will have an advantage over the European or any other companies in the world.

mananjune · Answer

In this way, C can also be wrong. Let say out of 100% of solar power generators, 90% are exported to Europe. The remaining 10% of the production is(let say) enough for 50% market share. The competitive advantage also stands now.

The demand in US is limited, and if demand grows to lets say 2x, then also production will have to be stopped as demand still in US is limited(as compared to the production).

TheUltimateWinner · Answer

Hi  Bunuel 
This question is from GMATPrep Soft. It is better if you tag it. 
Thanks__

mSKR · Answer

Your reasoning is not wrong, that's why in the conclusion it says " probably", means whatever the demand is increased , that increased demand needs to be filled by USA manufacturers.

achilles229 · Answer

Can someone please explain why A is wrong?

thereisaFire · Answer

Hi experts  AjiteshArun   VeritasKarishma   GMATNinja

I feel that choice E, which states "the current market for solar-power generators in the United States is very limited", can be a strengthener.

As European Manufacturers are emerging and probably will ultimately capture much of the European market, US manufacturers' proportion in the European markets will decrease. It can be compensated if the US market allows it's own manufacturers to do so, i.e. the circle of people using those generators expands.

Can someone please explain where I am stumbling.

KarishmaB · Answer

Option (E) is not adding anything new to the argument. You are already given that the Govt is encouraging the use of solar power within the United States. The next sentence further clarifies: If these initiatives succeed in increasing the demand for solar-power generators in the United States, United States manufacturers will probably maintain significant production levels, since ... The argument is concluding that if demand does increase, then US manufacturers will maintain good production levels. We need to give a reason why US demand increase will help US manufacturers. It is so because US manufacturers have certain home country advantages. So likely that an increase in demand in US will be met by them. Also check here: https://gmatclub.com/forum/united-state ... l#p2799357

BottomJee · Answer

I think this is a  high-quality  question and I agree with explanation.

einstein801 · Answer

E should be the answer. Hey  IanStewart ,  GMATNinja , would you be able to confirm this?

Gemmie · Answer

(A) Increased output:  This suggests US manufacturers are prepared to meet a potential rise in US demand. It strengthens the argument.

(B) Efficiency not improving as fast:  This doesn't directly affect US manufacturers' ability to maintain production if demand increases domestically. It's irrelevant.

(C) Competitive advantages in the US:  This is a strong possibility. Just like Europe favors its manufacturers, a rise in US demand would benefit US companies. This strengthens the argument.

(D) European initiatives:  What Europe does doesn't affect the potential for increased US demand to benefit US manufacturers. It's irrelevant.

(E) Limited US market:  This suggests there's room for growth in US production, but it doesn't explain why US manufacturers would maintain production levels. It's a weak explanation.

Ro_007 · Answer

Why cant it be the reason when the question states that demand will increase with the funding? Stating the current mkt is limited and demand will increase with funding explains "maintaining" significant production levels better than having comptt advantage ?

Am I going out of bounds of the argument ? is it far fetched ?

V07-11

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