Here's the
official explanation provided by the GMAC for this question:
According to the sentence, the pollution-control industry prospered until a few years ago, because of a national concern for environmental controls. Recently, however, many companies in the industry have suffered a sharp decline in sales and profits. The version given is not correct; for one thing, the verb phrase
has recently experienced is singular, whereas its subject,
many companies, is plural. Also, the verb-form
has prospered normally indicates a past action extending into the present or recent past, not applicable here.
Option A: This answer choice is incorrect, for the reasons explained. The preposition
on account of has
because of as one of its meanings.
Option B: The word
up is unnecessary and informal. Overall, this version is incoherent because it implies that the companies experienced reduced sales and profits when prospering. Moreover, this version consists only of a noun phrase
many companies … industry following by a relative clause modifying that phrase, together with an embedded adverbial clause
when … controls. In other words, this is not a proper sentence because it has no independent clause.
Option C: Correct.The past-continuous verb form
was prospering is appropriate here. The present-perfect plural verb form
have … experienced agrees with the plural subject
companies and is appropriate for describing a recent experience that may be continuing into the present. The use of
because of introduces a description of a cause
.Option D: The word
up is unnecessary and informal. Because of the plural verb
have in the relative clause
which … controls, the clause applies to
many companies rather than to
the pollution-control industry. The singular verb
has should also be plural to agree with the same subject.
Option E: The singular verb
has is incorrect because its subject
many companies is plural.
The correct answer is C.
Please note that I'm not the author of this explanation. I'm just posting it here since I believe it can help the community.