LR Drill Set 6, Question 9
Entrepreneur: Recently a small piece of moon rock(61 more words not shown)
Which one of the following,(7 more words not shown)
- AThe larger a(18 more words not shown)
- BThe Moonmine Corporation(22 more words not shown)
- CNo corporation or(19 more words not shown)
- DPeople who are(25 more words not shown)
- EThe costs of(27 more words not shown)
Reading the argument
What happens to the price when moon rock stops being so rare?
More than $200,000 a gram is an impressive auction price. I can see why it attracts the entrepreneur's attention. If a mining company could keep getting that price, even an expensive space operation might produce a large profit.
But “at that price” is doing a lot of work.
Perhaps buyers pay so much precisely because almost nobody owns a piece. Bring back a large supply, and the thing that made the rock valuable could disappear. A mining operation changes the market it plans to enter; it doesn't necessarily get to multiply today's price by every gram it delivers.
What we’re looking for
The weakener I expect is evidence that more available moon rock would reduce its price. We're questioning the proposed profit even if the company establishes the mine. The question is whether the price supporting that profit estimate will survive the company's own increase in supply.
Working the answers
- A
A relationship between the size of naturally falling rocks and their likelihood of reaching Earth doesn't establish what buyers will pay for mined rock. The proposed business collects material directly from the Moon. We need a fact affecting the argument for profit, not merely a fact about how the auctioned rock arrived.
- B
This challenges whether the company can establish the mine. But the conclusion explicitly says it would be profitable if that goal were achieved. A business plan could be impossible to carry out and still describe a profitable operation under the hypothetical conditions. To weaken this conditional profit claim, let the company get its mine and question whether it would earn the predicted money.
- C
Never having made a profit before doesn't establish that the new operation couldn't do so. Perhaps nobody has attempted a comparable operation, or conditions have changed. The historical absence of profit doesn't by itself expose a problem with the entrepreneur's price-based prediction.
- DCorrect
These buyers value the rocks only because so little is owned on Earth. That gives us a concrete reason to doubt the assumption that mined rock will keep selling at the auction price. The company plans to add supply, potentially undermining the very scarcity driving that price. D doesn't calculate the new price or prove the company must lose money; it weakens the claim of extreme profitability by challenging its crucial revenue assumption.
- E
Costs per gram could depend on volume in either direction. A larger haul might spread fixed expenses over more rock and reduce the cost per gram, or bring additional expenses. E doesn't tell us which happens or whether the costs defeat the predicted profit. Merely saying that quantity affects cost doesn't supply the needed unfavorable result.
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