Q4 - An economist has argued

[myradin]

I had this question narrowed down to C & E. I correctly went with C, but what is the precise reason to eliminate E in this strengthen question? Is it because the real premise for why consumers benefit when governments permit a corporation to obtain a monopoly because consumers receive the fruits of investments companies make in research and industrial infrastructure (regardless of how the companies went about making those investment decisions)? Thus E does not really enhance that premise in that it does not ensure that such an investment is made or that consumers receive the fruits of such an investment just because it affirms that a corporation spends less money on advertising? Whereas in C, the consumers not only get the advantages of the investments explicitly, but they also get benefits that outweigh the costs from their loss in increased prices?

[tommywallach]

Hey Myradin,

In order to talk about (E) specifically, let's kick it off by locating the core (conclusion and premise), and discussing the assumption (i.e. why the argument is bad). Strengthen/weaken questions always revolve around an argument's assumption:

Conclusion: Monopolies = good
Premise: Money saved on advertising invested in new stuff, which consumers can then enjoy

The problem with this argument is fairly obvious, namely that monopolies also keep prices down. When a company has a monopoly, it can charge whatever it wants. We need to know either that they WILL NOT do that, OR if they do, that the overall effect on consumers will still be positive.

(A) The argument only talks about this in regards to companies with a monopoly. We don't know anything about companies that do NOT have a monopoly. Either way, the argument works even if there are better ways to help consumers, as long as this method ALSO helps consumers.

(B) This doesn't really strengthen the argument. It's already been said, more or less, and if anything, it weakens the argument by implying that some companies might not do that (pass on the fruits).

(C) This is exactly what we predicted.

(D) If anything, this weakens the argument, implying that companies will pass on some fruit even if they DO NOT get a monopoly (which would give them carte blanche to raise prices).

(E) This doesn't connect to the conclusion at all. The conclusion is that monopolies are good. This doesn't make them good, it just means that companies will always want a monopoly. The effect on the consumer is unknown.

This is why it's so important to have a strong sense of your conclusion when looking at the answer choices. (E) may look tempting, until you notice that it doesn't actually connect to the conclusion of the argument!

Hope that helps!

-t

[ywan1990]

Hi! I have a further question on answer (E). So my logic is essentially as follows:

The economist argues that being a monopoly CAN allow the corporation to do certain thing that eventually benefits the customers.

So it seems to me the flaw of the argument is that even though a corporation can do this, but it may choose not to. For instance, despite being a monopoly, a corporation can still keep the same pricing and advertising spendings, in which case no extra money will be diverted into research and eventually the customers will not benefit.

So (E) seems to strengthen the argument by confirming that if a corporation can,it will divert the money into research.

Could anyone please answer this question? Thanks a lot.

[tommywallach]

Hey Ywan,

Hmm. You're jumping to the third part here, but this answer only gives us the first 2. We know that they're going to raise prices (which is bad for consumers) and then invest less in advertising. But we don't know what they'll do from there. They could pay bonuses to the CEO, or a divided to shareholders, or keep the money in the company's coffers. We don't know they'll actually invest in research and infrastructure.

Hope that helps!

-t

[ASHUTOSHT779]

Hi, I don't understand why we chose (C) over (A) & (B). Below is my approach, can someone please take a look at it?

P1: Without competition, a corporation can raise prices
P2: corporation invest in expensive research or industrial infrastructure, passing the fruits of these investments on to consumers.

Conclusion: consumers often benefit when government permits a corporation monopoly.

we have to address the gap between premise ''expensive research or ....'' and conclusion ''consumer benefit''

This Gap is addressed in all A, B, and C. All options fulfills If Premise then conclusion, right?
Even if ''A'' talks about the comparison and ''B'' brings the necessary condition, they still talk about the GAP, then why should i choose C over A & B?

Thanks