Most economists in the United States seem captivated by the spell of

Question

Most economists in the United States seem captivated by the spell of the free market. Consequently, nothing seems good or normal that does not accord with the requirements of the free market. A price that is determined by the seller or, for that matter, established by anyone other than the aggregate of consumers seems pernicious. Accordingly, it requires a major act of will to think of price-fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that it requires. Modern industrial planning requires and rewards great size. Hence, a comparatively small number of large firms will be competing for the same group of consumers. That each large firm will act with consideration of its own needs and thus avoid selling its products for more than its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with full consideration of the needs that it has in common with the other large firms competing for the same customers. Each large firm will thus avoid significant price-cutting, because price-cutting would be prejudicial to the common interest in a stable demand for products. Most economists do not see price-fixing when it occurs because they expect it to be brought about by a number of explicit agreements among large firms; it is not.

Moreover, those economists who argue that allowing the free market to operate without interference is the most efficient method of establishing prices have not considered the economies of non-socialist countries other than the United states. These economies employ intentional price-fixing, usually in an overt fashion. Formal price-fixing by cartel and informal price-fixing by agreements covering the members of an industry are commonplace. Were there something peculiarly efficient about the free market and inefficient about price-fixing, the countries that have avoided the first and used the second would have suffered drastically in their economic development. There is no indication that they have.

Socialist industry also works within a framework of controlled prices. In the early 1970’s, the Soviet Union began to give firms and industries some of the flexibility in adjusting prices that a more informal evolution has accorded the capitalist system. Economists in the United States have hailed the change as a return to the free market. But Soviet firms are no more subject to prices established by a free market over which they exercise little influence than are capitalist firms; rather, Soviet firms have been given the power to fix prices.   1 
 1. The primary purpose of the passage is to

(A) refute the theory that the free market plays a useful role in the development of industrialized societies
(B) suggest methods by which economists and members of the government of the United States can recognize and combat price-fixing by large firms
(C) show that in industrialized societies price-fixing and the operation of the free market are not only compatible but also mutually beneficial
(D) explain the various ways in which industrialized societies can fix prices in order to stabilize the free market
(E) argue that price-fixing, in one form or another, is an inevitable part of and benefit to the economy of any industrialized society

2 
 2. The passage provides information that would answer which of the following questions about price-fixing?

I.  What are some of the ways in which prices can be fixed?
 II.  For what products is price-fixing likely to be more profitable that the operation of the free market?
 III.  Is price-fixing more common in socialist industrialized societies or in non-socialist industrialized societies?

(A) I only
(B) III only
(C) I and II only
(D) II and III only
(E) I, II, and III

3 
 3. The author’s attitude toward “Most economists in the United States” (line 1) can best be described as

(A) spiteful and envious
(B) scornful and denunciatory
(C) critical and condescending
(D) ambivalent but deferential
(E) uncertain but interested

4 
 4. It can be inferred from the author’s argument that a price fixed by the seller “seems pernicious” (line 7) because

(A) people do not have confidence in large firms
(B) people do not expect the government to regulate prices
(C) most economists believe that consumers as a group should determine prices
(D) most economists associate fixed prices with communist and socialist economies
(E) most economists believe that no one group should determine prices

5 
 5. The suggestion in the passage that price-fixing in industrialized societies is normal arises from the author’s statement that price-fixing is

(A) a profitable result of economic development
(B) an inevitable result of the industrial system
(C) the result of a number of carefully organized decisions
(D) a phenomenon common to industrialized and non-industrialized societies
(E) a phenomenon best achieved cooperatively by government and industry

6 
 6. According to the author, price-fixing in non-socialist countries is often

(A) accidental but productive
(B) illegal but useful
(C) legal and innovative
(D) traditional and rigid
(E) intentional and widespread

7 
 7. According to the author, what is the result of the Soviet Union’s change in economic policy in the 1970’s?

(A) Soviet firms show greater profit.
(B) Soviet firms have less control over the free market.
(C) Soviet firms are able to adjust to technological advances.
(D) Soviet firms have some authority to fix prices.
(E) Soviet firms are more responsive to the free market.

8 
 8. With which of the following statements regarding the behavior of large firms in industrialized societies would the author be most likely to agree?

(A) The directors of large firms will continue to anticipate the demand for products.
(B) The directors of large firms are less interested in achieving a predictable level of profit than in achieving a large profit.
(C) The directors of large firms will strive to reduce the costs of their products.
(D) Many directors of large firms believe that the government should establish the prices that will be charged for products.
(E) Many directors of large firms believe that the price charged for products is likely to increase annually.

9 
 9. In the passage, the author is primarily concerned with

(A) predicting the consequences of a practice
(B) criticizing a point of view
(C) calling attention to recent discoveries
(D) proposing a topic for research
(E) summarizing conflicting opinions

Nikhil · Accepted Answer

Official explanations

1. The primary purpose of the passage is to

(A) refute the theory that the free market plays a useful role in the development of industrialized societies

(B) suggest methods by which economists and members of the government of the United States can recognize and combat price-fixing by large firms

(C) show that in industrialized societies price-fixing and the operation of the free market are not only compatible but also mutually beneficial

(D) explain the various ways in which industrialized societies can fix prices in order to stabilize the free market

(E) argue that price-fixing, in one form or another, is an inevitable part of and benefit to the economy of any industrialized society

The best answer is E. The author contends that price-fixing is normal and beneficial in industrialized societies. The author proceeds to support this assertion with descriptions of various forms of price-fixing in various kinds of industrialized societies. Moreover, in the context of a discussion of nonsocialist countries other than the United States, the author indirectly restates the argument in favor of price-fixing.

2. The passage provides information that would answer which of the following questions about price-fixing?

I. What are some of the ways in which prices can be fixed?
II. For what products is price-fixing likely to be more profitable that the operation of the free market?
III. Is price-fixing more common in socialist industrialized societies or in non-socialist industrialized societies?

(A) I only 
(B) III only
(C) I and II only 
(D) II and III only 
(E) I, II, and III

This question asks whether one or more of the questions identified by Roman numerals can be answered on the basis of the information given in the passage. In questions of this kind, each part identified by a Roman numeral must be considered individually. The question I can be answered by the information in following excerpts which mention some different ways of fixing prices. Questions II and III cannot be answered from information provided by the passage. The best answer, therefore, is A

3. The author’s attitude toward “Most economists in the United States” (line 1) can best be described as

(A) spiteful and envious
(B) scornful and denunciatory
 (C) critical and condescending 
(D) ambivalent but deferential
(E) uncertain but interested

The best answer is C. Determining the author's attitude toward a topic requires locating all references to the topic in the passage and considering both the literal meanings and the connotations of the words used concerning the topic. Thus, the author refers to "most economists" or "economists in the United States" or "those economists". The author describes them as "captivated by the spell of the free market," as failing to see price- fixing when it occurs, as failing to consider the economies of nonsocialist countries other than the United States, and as mistakenly "hailing" price-fixing in the Soviet Union as a return to the free market. The choice that best describes these references is "critical and condescending."

4. It can be inferred from the author’s argument that a price fixed by the seller “seems pernicious” (line 7) because

(A) people do not have confidence in large firms
(B) people do not expect the government to regulate prices
 (C) most economists believe that consumers as a group should determine prices 
(D) most economists associate fixed prices with communist and socialist economies
(E) most economists believe that no one group should determine prices

The best answer is C. Lines 1-7 allow one to infer that it is to "Most economists" (line I) that a price fixed by the seller "seems pernicious," and that these economists consider
price-fixing pernicious because they believe that only the "aggregate of consumers" (line 7) should establish prices.

5. The suggestion in the passage that price-fixing in industrialized societies is normal arises from the author’s statement that price-fixing is

(A) a profitable result of economic development
 (B) an inevitable result of the industrial system 
(C) the result of a number of carefully organized decisions
(D) a phenomenon common to industrialized and non-industrialized societies
(E) a phenomenon best achieved cooperatively by government and industry

The best answer is B, based on lines 11-15, which state that price-fixing is normal in all industrialized societies because the industrial system provides price-fixing " as an effortless consequence of its own development."

6. According to the author, price-fixing in non-socialist countries is often

(A) accidental but productive
(B) illegal but useful
(C) legal and innovative
(D) traditional and rigid
 (E) intentional and widespread

The best answer is E, based on lines 38 ("intentional price- fixing") and 41-42 ("commonplace").

7. According to the author, what is the result of the Soviet Union’s change in economic policy in the 1970’s?

(A) Soviet firma s show greater profit.
(B) Soviet firms have less control over the free market.
(C) Soviet firms are able to adjust to technological advances.
 (D) Soviet firms have some authority to fix prices. 
(E) Soviet firms are more responsive to the free market.

The best answer is D. In lines 49-53, the author states that, in the early 1970's, the Soviet Union gave firms some " flexibility in adjusting prices." In lines 58-59, the author states that what these firms have in fact been given is "the power to fix prices." Thus, the result of the Soviet Union's change in economic policy in the 1970's is choice D, "Soviet firms have some authority to fix prices ."

8. With which of the following statements regarding the behavior of large firms in industrialized societies would the author be most likely to agree?

(A) The directors of large firms will continue to anticipate the demand for products. 
(B) The directors of large firms are less interested in achieving a predictable level of profit than in achieving a large profit.
(C) The directors of large firms will strive to reduce the costs of their products.
(D) Many directors of large firms believe that the government should establish the prices that will be charged for products.
(E) Many directors of large firms believe that the price charged for products is likely to increase annually.

The best answer is A. The author discusses the behavior of large firms in industrialized societies in lines 15-29. In lines 26-29, the author refers to the firms' "common interest in a stable demand for products." It can be inferred from these references that the author believes that the directors of large firms currently anticipate the demand for products. Since the author describes price-fixing as an ongoing phenomenon (lines 11-29), it can be inferred that the author would be likely to agree that the large firms' directors will also con- tinue to anticipate the demand for products.

9. In the passage, the author is primarily concerned with

(A) predicting the consequences of a practice
 (B) criticizing a point of view 
(C) calling attention to recent discoveries
(D) proposing a topic for research
(E) summarizing conflicting opinions

The best answer is B. Throughout the passage, the author criticizes the point of view of ' 'most economists in the United States" -those who believe that the free market is best and that price-fixing is pernicious. Thus, the first paragraph argues that price-fixing is normal and valuable in all industrialized countries. The second paragraph argues that the experience of nonsocialist countries other than the United States provides no support for the point of view of these economists. The third paragraph argues that these economists are wrong in thinking that the Soviet Union has moved toward a free market. Thus, it can be inferred that the author's primary concern is to criticize this point of view.

GMATNinja · Answer

Although it is true that the author discusses the free market and price fixing, to answer primary purpose questions it is more important to determine  why  the author wrote the passage, rather than focusing on  what  the author wrote about.

To find that all-important "why," let's break down the passage into smaller chunks:

First, the author introduces the view of "most economists," who think that "nothing seems good or normal that does not accord with the requirements of the free market." 
 These economists think that any form of price-fixing is "pernicious" (in other words, it has a negative effect). 
 Then, the author argues against this view, stating that "in fact, price-fixing  is  normal."

In these first sentences, the author accomplishes a couple of things: first, he/she sets up a  contrast : on one hand, there are the requirements of the free market. On the other hand, there is price-fixing.

Then, he/she makes the argument that "price-fixing is normal." This argument goes  against  the view of most economists.

Continuing on through the passage:

The author explains how price-fixing occurs in modern industrial economies 
 In the next paragraph, the author argues that the free market is not the most efficient system, stating that in industrialized countries outside of the US, price-fixing is an overt practice that has not hindered economic development 
 Finally, the author discusses socialist industrial economies: he/she thinks that the easing of regulations was NOT a "return to the free market." Instead, it just allowed Soviet firms to fix prices

In all, this information serves to  support  the author's argument  against  the view of most economists.

With that in mind, take another look at (C):

Hmm, not quite. From our analysis, we know that the author sets up a  contrast  between the requirements of the free market and the practice of fixing prices. While most economists believe that  free market = good  and  fixing prices = bad,  the author thinks that fixing prices is a normal part of industrialized economies, and that it does not negatively impact efficiency.

Because the author weighs in heavily on the side of price-fixing, and argues against economists who are "captivated by the spell of the free market," we can't say that his/her purpose in writing the passage was to show that these two concepts are "not only compatible but also mutually beneficial."

Eliminate (C).

Here's (E):
 
We can say with certainty that the author argues in support of price-fixing, but does he/she believe that it is "an  inevitable  part of and benefit to the economy of  any industrialized society ? To confirm, let's go back to the most relevant piece of the passage, in which he/she makes his/her main argument:

"Price-fixing is normal in  all industrialized societies  because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that it requires."

In other words, price-fixing  is  inevitable in all industrialized societies, because the system automatically creates the "price-fixing that it requires."

(E) accurately captures why the author wrote the passage, so it is the correct answer.

I hope that helps!

jawele · Answer

1. The primary purpose of the passage is to
(A) refute the theory that the free market plays a useful role in the development of industrialized societies the argument discusses whether price-fixing plays a useful role, not the free market
(B) suggest methods by which economists and members of the government of the United States can recognize and combat price-fixing by large firms superficial words match
(C) show that in industrialized societies price-fixing and the operation of the free market are not only compatible but also mutually beneficial
(D) explain the various ways in which industrialized societies can fix prices in order to stabilize the free market Consequently, nothing seems good or normal that does not accord with the requirements of the free market. - clearly no
(E) argue that price-fixing, in one form or another, is an inevitable part of and benefit to the economy of any industrialized society In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that it requires. <...> Were there something peculiarly efficient about the free market and inefficient about price-fixing, the countries that have avoided the first and used the second would have suffered drastically in their economic development. There is no indication that they have. - correct

2. The passage provides information that would answer which of the following questions about price-fixing?
I. What are some of the ways in which prices can be fixed? "Each large firm will thus avoid significant price-cutting, because price-cutting would be prejudicial to the common interest in a stable demand for products. Most economists do not see price-fixing when it occurs because they expect it to be brought about by a number of explicit agreements among large firms; it is not." AND "These economies employ intentional price-fixing, usually in an overt fashion. Formal price-fixing by cartel and informal price-fixing by agreements covering the members of an industry are commonplace."
II. For what products is price-fixing likely to be more profitable that the operation of the free market? not given
III. Is price-fixing more common in socialist industrialized societies or in non-socialist industrialized societies? it's described in both societies, but not stated in which price-fixing is more common
(A) I only
(B) III only
(C) I and II only
(D) II and III only
(E) I, II, and III

3. The author’s attitude toward “Most economists in the United States” (line 1) can best be described as
(A) spiteful and envious too negatively strong - unprofessional
(B) scornful and denunciatory too negatively strong - unprofessional
(C) critical and condescending correct - what's left
(D) ambivalent but deferential actually the author keeps one stance - they miss some aspects about price fixing (my mistake choosing this one)
(E) uncertain but interested the author seems to be certain by claiming that they miss some points about price fixing

4. It can be inferred from the author’s argument that a price fixed by the seller “seems pernicious” (line 7) because relevant text: Consequently, nothing seems good or normal that does not accord with the requirements of the free market. A price that is determined by the seller or, for that matter, established by anyone other than the aggregate of consumers seems pernicious.
(A) people do not have confidence in large firms not given
(B) people do not expect the government to regulate prices people's opinion is not given
(C) most economists believe that consumers as a group should determine prices correct
(D) most economists associate fixed prices with communist and socialist economies seems to be true but isn't correct to answer the question
(E) most economists believe that no one group should determine prices actual they believe that market price is solely established by consumers

5. The suggestion in the passage that price-fixing in industrialized societies is normal arises from the author’s statement that price-fixing is relevant text: In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that it requires.
(A) a profitable result of economic development
(B) an inevitable result of the industrial system correct - simply a paraphrase of the statements above
(C) the result of a number of carefully organized decisions
(D) a phenomenon common to industrialized and non-industrialized societies
(E) a phenomenon best achieved cooperatively by government and industry

6. According to the author, price-fixing in non-socialist countries is often These economies employ intentional price-fixing, usually in an overt fashion. Formal price-fixing by cartel and informal price-fixing by agreements covering the members of an industry are commonplace.
(A) accidental but productive it's mentioned that price-fizing is intentional
(B) illegal but useful the opposite is true - legal
(C) legal and innovative innovative - not sure
(D) traditional and rigid might be true, but not given explicitly
(E) intentional and widespread correct

7. According to the author, what is the result of the Soviet Union’s change in economic policy in the 1970’s? relevant text: In the early 1970’s, the Soviet Union began to give firms and industries some of the flexibility in adjusting prices <...> Economists in the United States have hailed the change as a return to the free market. But <...>, Soviet firms have been given the power to fix prices.
(A) Soviet firms show greater profit.
(B) Soviet firms have less control over the free market. the opposite is true - they can fix prices
(C) Soviet firms are able to adjust to technological advances.
(D) Soviet firms have some authority to fix prices. correct
(E) Soviet firms are more responsive to the free market.

8. With which of the following statements regarding the behavior of large firms in industrialized societies would the author be most likely to agree?
(A) The directors of large firms will continue to anticipate the demand for products. the one that's left: demand is a factor that affect their choice not to increase or decrease the price too much; not sure about the relevant part of the passage for this one
(B) The directors of large firms are less interested in achieving a predictable level of profit than in achieving a large profit. profits are discussed
(C) The directors of large firms will strive to reduce the costs of their products. Each large firm will thus avoid significant price-cutting, because price-cutting would be prejudicial to the common interest in a stable demand for products.
(D) Many directors of large firms believe that the government should establish the prices that will be charged for products. unlikely because the firms operate in the free market; if anything the belief is not given
(E) Many directors of large firms believe that the price charged for products is likely to increase annually. That each large firm will act with consideration of its own needs and thus avoid selling its products for more than its competitors charge <..> - so this answer is incorrect

9. In the passage, the author is primarily concerned with
(A) predicting the consequences of a practice
(B) criticizing a point of view the author gives reasons to believe that price-fixing is good and that most economist advocating the free market might be wrong in their disbelief in price-fixing
(C) calling attention to recent discoveries
(D) proposing a topic for research
(E) summarizing conflicting opinions

NandishSS · Answer

1. The primary purpose of the passage is to

(A) refute the theory that the free market plays a useful role in the development of industrialized societies

(B) suggest methods by which economists and members of the government of the United States can recognize and combat price-fixing by large firms

(C) show that in industrialized societies price-fixing and the operation of the free market are not only compatible but also mutually beneficial

(D) explain the various ways in which industrialized societies can fix prices in order to stabilize the free market

(E) argue that price-fixing, in one form or another, is an inevitable part of and benefit to the economy of any industrialized society

HI  GMATNinja ,  mikemcgarry ,

can you help me with the above question?

The author is arguing about Free Market and Pricefixing...

tejanaraharisetti · Answer

Hi Experts /  GMATNinja ,

5. The suggestion in the passage that price-fixing in industrialized societies is normal arises from the author???s statement that price-fixing is

(A) a profitable result of economic development
(B) an inevitable result of the industrial system
(C) the result of a number of carefully organized decisions
(D) a phenomenon common to industrialized and non-industrialized societies
(E) a phenomenon best achieved cooperatively by government and industry

I am confused between options A and B, Would you please explain how to eliminate A?

GMATNinja · Answer

For (A) to be the correct answer, there needs to be evidence in the passage that economic development causes price-fixing and that it is profitable.

This part of the passage compares price-fixing and free-market systems. It suggests they both deliver similar economic development to their countries:
 
Does delivering economic development mean that price-fixing is PROFITABLE? Not explicitly. And more importantly, another problem is the argument in this sentence is the opposite way round to (A). (A) suggests that price-fixing is a  result  of economic development, not that it delivers economic development.

There is nothing in the passage suggesting price-fixing is a  profitable result  of economic development, so eliminate (A).

This part of the passage is most relevant when considering (B): 
If the industrial system provides the price-fixing that it requires, and if this happens in  all  industrialized societies, then price-fixing can be said to be part of the industrial system.

Also, if it doesn't matter what type of industrialized system you have in your society -- free market, socialist, or any other system -- and the system provides price-fixing as an  effortless consequence of its own development , then we can say price-fixing is an inevitable result of the system.

(B) is the correct answer to question 5.

I hope that helps!

mSKR · Answer

Why can't the answer be B ? Author criticize the economists for their suggestions /thoughts. Author shows how their opinions were not found to be true in different situations. He has no positive attitude towards these economists. i am looking for negative tone in the passage which B fits most suitable. 
Please suggest  GMATNinja   mikemcgarry ,

GMATNinja · Answer

Good question! You're right that the author is criticizing the economists, that the author believes the economists were wrong, and that the author's tone toward the economists is negative. But answer choice (B) isn't the only answer choice with a negative attitude toward the economists: answers choices (A) and (C) also involve negative attitudes. I'll stick to answer choices (B) and (C) here.

The words in answer choice (B) both have  very  strong tones. To denounce someone and to scorn someone is going further than saying they're  factually  wrong – it's saying that they're morally wrong. There's plenty of language in the passage to support the claim that the author thinks the economists are factually wrong; there isn't any language to support the conclusion that the author thinks the economists are  evil .

Answer choice (C) also states that the author has a negative view of the economists. To be critical of someone is to believe that they are wrong. That definitely fits the author's view. The second word in answer choice (C) is a little more interesting: where does the author look down on the economists in a condescending way? The clearest example is in the first sentence where the author says the economists have been "captivated by   spell." That isn't a very flattering way to describe an academic or a professional. The author is definitely looking down on the economists in a condescending way.

Overall, answer choice (C) fits the author's views: he or she believes the economists are wrong and looks down on them. Answer choice (B) is too strong: it goes beyond saying that the economists are wrong to say that they are bad or evil.

I hope that helps!

waytowharton · Answer

Hey experts,

GMATNinja   KarishmaB   ExpertsGlobal5

Could you please explain why option A is incorrect in question 1. In first line it is mentioned that most economists are captivated by free market, but few lines later author criticises it.

KarishmaB · Answer

The entire passage talks about why price fixing by the seller works. It doesn't refute that free market plays a useful role. It only says that even though price fixing is against the free market tenet, it is still useful to the economy.

Notice the beginning of the passage:

Most economists in the United States seem captivated by the spell of the free market. Consequently, nothing seems good or normal that does not accord with the requirements of the free market. A price that is determined by the seller or, for that matter, established by anyone other than the aggregate of consumers seems pernicious. Accordingly, it requires a major act of will to think of price-fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because ...

The passage starts with the mention of free market and that price fixing seems unacceptable to economists because it is against the free market ideology. Then the passage says that that is why to think of price fixing as useful needs a lot of effort. Then he goes on to say that price fixing is indeed useful and normal because ... and thus continues the rest of the passage.

The point of the passage is that price fixing is normal and useful.

GMATNinja · Answer

Question 1 
 
Question 1 asks us to find the author's primary purpose. Here's (A):
 
You're right that the author criticizes economists who "seem captivated by the spell of the free market." But that's way different than saying that the free market doesn't play a useful role  at all .

The author just thinks that these economists are so blinded by love of the free market that they miss the importance of price-fixing. He/she never argues that the free market isn't  also  important -- instead, he/she just says that price-fixing is a component overlooked by these economists.

So, it's not quite right to say that the author refutes the useful role of the free market. Eliminate (A) for question 1.

I hope that helps!

Rickooreo · Answer

GMATNinja  
 KarishmaB  
 egmat 
 EMPOWERgmatVerbal   RonTargetTestPrep   TommyWallach  and all GMAT expert

This passage is big and I got confused in what passage is trying to say at one point. If the same happens in exam, what should I do?
For instance, in paragraph 2 
"Moreover, those economists who argue that allowing the free market to operate without interference is the most efficient method of establishing prices have not considered the economies of non-socialist countries other than the United states."

Here is some change of opinion without any background: Were there something peculiarly efficient about the free market and inefficient about price-fixing, the countries that have avoided the first and used the second would have suffered drastically in their economic development. There is no indication that they have.

I tend to re-read quite frequently while solving verbal questions

I read random articles and I understood sentences quite easily without the need to re-read. (source of article : The Economist). 
So I think THE SOLE REASON for this re-reading is the pressure I am in while solving the question.

Now, there will be (atleast for me) a huge difference in degree of pressure while solving question in the exam than solving questions in the the mock or from question bank. In exam, I will not be confident as to whether I have understood the sentence properly + being in the pressure will make it difficult to focus on what the sentence is trying to say

Practicing question in timed fashion doesn't seem to be the solution because the kind of pressure will be different. What do you suggest I should be doing . Also, the way I should practise question so that I can handle the exam situation.

KarishmaB · Answer

The more you obsess about it, the worse it is going to get. We know that if we do not get our target score in the actual exam, we can cancel it and no one will be the wiser. That should give you some re-assurance in the actual test. It is not a make or break situation, so take a deep breath and do your best. Meanwhile, practice under timed conditions and if required, give yourself even less time than is available on the actual test.

RonTargetTestPrep · Answer

This passage is complete garbage. I can see why you had to re-read it a bunch of times—it's so horribly written that it's practically unintelligible.
I don't know where this passage came from, but it's definitely not official. (GMAC's passages are tightly organized and VERY well written.) Please ignore it.

woohoo921 · Answer

For question 2, is the support in the passage here for Choice A?
--> "That each large firm will act with consideration of its own needs and thus avoid selling its products for more than its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with full consideration of the needs that it has in common with the other large firms competing for the same customers. Each large firm will thus avoid significant price-cutting, because price-cutting would be prejudicial to the common interest in a stable demand for products. Most economists do not see price-fixing when it occurs because they expect it to be brought about by a number of explicit agreements among large firms; it is not."

GMATNinja · Answer

Question 2 
 
Here's question 2:
 
The author discusses several methods of price fixing. The first one, as you've mentioned, is discussed in the second half of the first paragraph.

Additionally, the author mentions that "formal price-fixing by cartel and informal price-fixing by agreements covering the members of an industry are commonplace" in non-socialist countries outside of the US.

Both of these sections provide some ways for prices to be fixed, so (A) is the correct answer.

I hope that helps!

VerbalBot · Answer

Automated notice from GMAT Club VerbalBot:

A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.

This post was generated automatically.

Most economists in the United States seem captivated by the spell of

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

Most economists in the United States seem captivated by the spell of

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