Products with innovative and appealing designs relative to competing

Question

Products with innovative and appealing designs relative to competing products often command substantially higher prices in the marketplace.  Because design innovations are quickly copied by other manufacturers , many consumer technology companies charge as much as possible for their new designs to extract as much value as possible from them. But large profits generated by innovative designs give stronger incentives to copy the designs. Therefore,  the best strategy to maximize overall profit from an innovative new design is to charge less than the greatest possible price.

In the argument above , the 2 portions in boldface (uppercase) play which of the following roles ?

(A) The First is an assumption that supports a described course of action; The second provides a consideration to support a preferred course of action.

(B) The first is a consideration that helps explain the appeal of a certain strategy;the second presents an alternative strategy endorsed by the argument.

(C) The first is a phenomenon that justifies a specific strategy ; the second is that strategy.

(D) The first is a consideration that demonstrates why a particular approach is flawed; the second describes a way to amend that approach.

(E) The first is a factor used to rationalize a particular strategy; The second is a factor against that strategy.

KarishmaB · Accepted Answer

Responding to a pm:

There are two strategies discussed here:
1. charge as much as possible for their new designs
2. CHARGE LESS THAN THE GREATEST POSSIBLE PRICE.

The argument endorses the second strategy.

The first statement in bold "BECAUSE DESIGN INNOVATIONS ARE QUICKLY COPIED BY OTHER MANUFACTURERS" explains the reason for the appeal of the first strategy.
The second statement in bold is the second strategy, the strategy endorsed by the argument.

Answer is option (B) (not (C)).

KarishmaB · Answer

(E) The first is a factor used to rationalize a particular strategy; The second is a factor against that strategy.

(E) is incorrect because the second bold statement is not a factor against the strategy to charge as much as possible but it is actually an alternative strategy - "to charge less". 
(B) gives you the correct answer.

PUNEETSCHDV · Answer

Can you please confirm himanshu that the OA is B or C . .I am nobody to challenge the accuracy of Karishma and infact i also marked B for this , but after looking at answer i was able to justify C . as the first bolded phrase does justify the strategy in second bold face and for B

The first is a consideration that helps explain the appeal of a certain strategy >> to extract as much profit as possible yes it refers to this strategy but the wording of answer choice does create confusion. .

imhimanshu · Answer

@ PUNEETSCHDV

The OA is C. However, I would recommend you not to study this problem, rather solve OG Boldface questions. The structure of this CR is very much similar to one of the OG question. I don't have OG with myself right now, otherwise would have posted the problem number.

Thanks
H

KarishmaB · Answer

Again, C is incorrect. Don't take my word for it. Think on your own.

C says:
 The first is a phenomenon that justifies a specific strategy  - this is fine. It justifies "charge as much as possible for their new designs"
  the second is that strategy . - this is incorrect. The second is not the strategy that the first part justifies. The second is the strategy "CHARGE LESS THAN THE GREATEST POSSIBLE PRICE."

B says:
 The first is a consideration that helps explain the appeal of a certain strategy;  - this is fine. It explains the appeal of "charge as much as possible for their new designs"
 the second presents an alternative strategy endorsed by the argument.   - this is fine. It presents "CHARGE LESS THAN THE GREATEST POSSIBLE PRICE", the strategy endorsed by the argument.

PUNEETSCHDV · Answer

i just wanted to confirm that does first bold face justifies the second strategy or not ?? to me it seems it does. .do not charge the greatest possible to discourage the copiers . ..

BECAUSE DESIGN INNOVATIONS ARE QUICKLY COPIED BY OTHER MANUFACTURERS. . . therefore THE BEST STRATEGY TO MAXIMIZE OVERALL PROFIT FROM AN INNOVATIVE NEW DESIGN IS TO CHARGE LESS THAN THE GREATEST POSSIBLE PRICE.

is it fine to read the two bold face parts in relative to the whole stimulus and also to read them relative to each other before moving to answers or should we read them relative to stimulus only and not relative to each other as this might distract us , as i do find logic in C for this one ??

KarishmaB · Answer

The argument gives the first bold statement to support strategy 1 (charge greatest). Another line in the argument "But large profits generated by innovative designs give stronger incentives to copy the designs." supports strategy 2 (charge less).

You do not read the boldface sentences relative to each other. You read them only relative to the entire argument. Look at the question asked: "In the argument above, the 2 portions in boldface (uppercase) play which of the following roles ?"

What role do the boldface portions play in the ARGUMENT?

lajulajay · Answer

For the record, the source of this question is MGMAT CR 5th Edition and MGMAT has acknowledged in the errata that the correct answer is in fact B not C.

mohnish104 · Answer

Can somebody explain why the answer is not E?

HKHR · Answer

Can someone please clarify why D is wrong? D seems to fit perfectly.

KarishmaB · Answer

Certain strategy - charge as much as possible for their new designs
Appeal of the strategy (reason this strategy is applied) - BECAUSE DESIGN INNOVATIONS ARE QUICKLY COPIED BY OTHER MANUFACTURERS,

Another strategy endorsed by the argument - TO CHARGE LESS THAN THE GREATEST POSSIBLE PRICE

(D) The first is a consideration that demonstrates why a particular approach is flawed;...
This is incorrect. The first bold statement does not demonstrate the flaw of the approach. It demonstrates the appeal of the approach. Companies charge as much as possible at the outset because innovations are quickly copied.

HKHR · Answer

Thank you for your response Karishma. But I have a follow up question on D. If you look at the text in  red , I feel it demonstrates why this particular approach is flawed. The text in  blue   suggests a way to amend this approach, which is to charge less than the greatest possible price. Any mistake in this interpretation?

KarishmaB · Answer

Your interpretation is correct.

HKHR · Answer

If my interpretation is correct then option D is correct, right? I am sorry to ask so many questions but I am confused.

KarishmaB · Answer

The first underlined sentence is "BECAUSE DESIGN INNOVATIONS ARE QUICKLY COPIED BY OTHER MANUFACTURERS,"
This explains the appeal of charging as much as possible. It does not explain why an approach is flawed (as listed in option (D)).
The sentence in red is the one which explains why the approach is flawed. The two sentences are not the same.

zoskybuck · Answer

Products with innovative and appealing designs relative to competing products can often command substantially higher prices in the marketplace.  Because design innovations are quickly copied by other manufacturers, many consumer technology companies charge as much as possible for their new designs to extract as much value as possible from them. But large profits generated by the innovative designs give competitors stronger incentives to copy the designs. Therefore,  the best strategy to maximize overall profit from an innovative new design is to charge less than the greatest possible price.

In the argument above, the two portions in boldface play which of the following roles?

(A) The first is an assumption that supports a described course of action; the second provides a consideration to support a preferred course of action. Not the answer..The first one is not an assumption but a fact..

(B) The first is a consideration that helps explain the appeal of a certain strategy; the second presents an alternative strategy endorsed by the argument. Bingo,this is the correct answer..Because innovations are quickly copied by other manufacturers,that's why charging as much as possible appeal to many consumer technology company..But charging as much give competitors stronger incentives to copy the designs..,The best strategy to maximize overall profits from an innovative design is to charge less than the greatest possible price,an alternative strategy endorsed by the argument

(C) The first is a phenomenon that makes a specific strategy unlikely to be successful; the second is that strategy.  Not correct

(D) The first is a consideration that demonstrates why a particular approach is flawed; the second describes a way to amend that approach.  The second bold face is not a way to amend that approach but a totally different strategy all together endorsed by the argument

(E) The first is a factor used to rationalize a particular strategy; the second is a factor against that strategy. Not correct..We actually have two different strategies here..Charging prices as high as possible and charging a lower price

KUDOS WOULDN'T HURT IF YOU FIND THIS EXPLANATION HELPFUL!!!I WILL SURELY APPRECIATE IT..THANKS

Crytiocanalyst · Answer

(A) The First is an assumption that supports a described course of action; The second provides a consideration to support a preferred course of action.
It doesn't support a course of action but rather denies it

(B) The first is a consideration that helps explain the appeal of a certain strategy;the second presents an alternative strategy endorsed by the argument.
Yes exactly what the argument is committing

(C) The first is a phenomenon that justifies a specific strategy ; the second is that strategy.
No both the stratergies are completely different

(D) The first is a consideration that demonstrates why a particular approach is flawed; the second describes a way to amend that approach.
Second doesn't amend it but describes completely different approach

(E) The first is a factor used to rationalize a particular strategy; The second is a factor against that strategy
No it is against the stratergy 
Hence IMO B

brianmontanaweb · Answer

These questions types are the most difficult. The first strategy I use is to narrow down the intention of the sentence by determining it's intention before reading the options.

The first statement is before a typical strategy used to maximize profit from a product. As we continue there's more supporting evidence on why this strategy is employed. Now the last bold statement switches the typical strategy to a new approach.

A is eliminated because it claims there is an assumption for a course of action. There is no assuming the author states it as a "strategy" in the conclusion.

C mentions strategy but calls the strategy a "phenomenon", which is the incorrect description. It's a typical, or generally applied strategy. Eliminate C.

D is incorrect because it doesn't use strategy to describe the statements.

E is incorrect because it claims that the bolded statement is one factor, possibly out of many, to justify a strategy. The bolded sentences are the entire strategy for maximizing profit.

B is the most concise and uses the expected language for describing the phrases intention.

pudu · Answer

why the first is not a phenomenon? We can observe this trend...then why not a phenomenon....

Products with innovative and appealing designs relative to competing

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Products with innovative and appealing designs relative to competing

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