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16 Sep 2014, 01:47
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Difficulty:
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Question Stats:
81% (01:19) correct
19%
(01:27)
wrong
based on 69
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Top Line Technologies and Eureka Industries distribute the same kind of rechargeable batteries to national electronic store chains. Employee wages comprise 38 percent of each company's total annual costs. In order to gain a competitive advantage over Eureka Industries, Top Line Technologies has proposed slashing employee wages by 10 percent.
Which of the following, if true, would most strengthen the argument above?
A. Top Line Technologies' rechargeable batteries have received more consistent consumer approval ratings than have Eureka Industries'.
B. Top Line Technologies will have to reduce the number of rechargeable batteries it distributes to client stores.
C. Eureka Industries is headquartered in a city that has a higher cost of living than does the city where Top Line Technologies is headquartered.
D. Top Line Technologies will begin distributing lower-quality rechargeable batteries.
E. Lowered employee wages have no effect on the quantity and quality of rechargeable batteries that can be distributed to the client stores.
Which of the following, if true, would most strengthen the argument above?
A. Top Line Technologies' rechargeable batteries have received more consistent consumer approval ratings than have Eureka Industries'.
B. Top Line Technologies will have to reduce the number of rechargeable batteries it distributes to client stores.
C. Eureka Industries is headquartered in a city that has a higher cost of living than does the city where Top Line Technologies is headquartered.
D. Top Line Technologies will begin distributing lower-quality rechargeable batteries.
E. Lowered employee wages have no effect on the quantity and quality of rechargeable batteries that can be distributed to the client stores.
16 Sep 2014, 01:47
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Official Solution:
Top Line Technologies and Eureka Industries distribute the same kind of rechargeable batteries to national electronic store chains. Employee wages comprise 38 percent of each company's total annual costs. In order to gain a competitive advantage over Eureka Industries, Top Line Technologies has proposed slashing employee wages by 10 percent.
Which of the following, if true, would most strengthen the argument above?
A. Top Line Technologies' rechargeable batteries have received more consistent consumer approval ratings than have Eureka Industries'.
B. Top Line Technologies will have to reduce the number of rechargeable batteries it distributes to client stores.
C. Eureka Industries is headquartered in a city that has a higher cost of living than does the city where Top Line Technologies is headquartered.
D. Top Line Technologies will begin distributing lower-quality rechargeable batteries.
E. Lowered employee wages have no effect on the quantity and quality of rechargeable batteries that can be distributed to the client stores.
Two companies distribute the same product and spend the exact same percentage of costs on employee wages. One wants to gain a competitive edge and proposes spending less money on employee wages. In order for this strategy to be advantageous, the company's ability to do business cannot be negatively effected by the wage cut.
So we need an answer choice that's going to restate or strengthen the author's assumption that cutting employee wages will not hurt business.
Since we're only concerned with the effect of lowered employee wages on business, choice A, which discusses consumer approval ratings, and choice C, which mentions the importance of the cost of living in the city where Top Line is located, are irrelevant.
Answer choices B and D would weaken the argument. If Top Line is forced to reduce the number of batteries it distributes to stores, as choice B suggests, Top Line's business would suffer. Likewise, if Top Line starts distributing poorer quality batteries, this is similarly bad for business.
We're left with answer choice E, which restates our assumption. If lowering wages has no effect on battery quality or distribution, it will not have a negative effect on Top Line's business.
Answer: E
Top Line Technologies and Eureka Industries distribute the same kind of rechargeable batteries to national electronic store chains. Employee wages comprise 38 percent of each company's total annual costs. In order to gain a competitive advantage over Eureka Industries, Top Line Technologies has proposed slashing employee wages by 10 percent.
Which of the following, if true, would most strengthen the argument above?
A. Top Line Technologies' rechargeable batteries have received more consistent consumer approval ratings than have Eureka Industries'.
B. Top Line Technologies will have to reduce the number of rechargeable batteries it distributes to client stores.
C. Eureka Industries is headquartered in a city that has a higher cost of living than does the city where Top Line Technologies is headquartered.
D. Top Line Technologies will begin distributing lower-quality rechargeable batteries.
E. Lowered employee wages have no effect on the quantity and quality of rechargeable batteries that can be distributed to the client stores.
Two companies distribute the same product and spend the exact same percentage of costs on employee wages. One wants to gain a competitive edge and proposes spending less money on employee wages. In order for this strategy to be advantageous, the company's ability to do business cannot be negatively effected by the wage cut.
So we need an answer choice that's going to restate or strengthen the author's assumption that cutting employee wages will not hurt business.
Since we're only concerned with the effect of lowered employee wages on business, choice A, which discusses consumer approval ratings, and choice C, which mentions the importance of the cost of living in the city where Top Line is located, are irrelevant.
Answer choices B and D would weaken the argument. If Top Line is forced to reduce the number of batteries it distributes to stores, as choice B suggests, Top Line's business would suffer. Likewise, if Top Line starts distributing poorer quality batteries, this is similarly bad for business.
We're left with answer choice E, which restates our assumption. If lowering wages has no effect on battery quality or distribution, it will not have a negative effect on Top Line's business.
Answer: E
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