PrepTest 102, Section 2, Question 18
President of Central Supply Company: Profits are at(52 more words not shown)
Which one of the following(10 more words not shown)
- AIt presumes without(12 more words not shown)
- BIt does not(10 more words not shown)
- CIt presumes without(14 more words not shown)
- DIt does not(15 more words not shown)
- EIt does not(15 more words not shown)
Reading the argument
Why are those the only two options?
Demand is down and profits are at their lowest, so I understand why the president wants to act. But cutting planned expansion or closing less profitable operations aren't the only responses I can imagine. What about improving the products? What about advertising to bring customers back? There might also be other ways to cut costs.
Those possibilities aren't guaranteed to work. Advertising costs money, and a new product could fail. We don't have to prove a better business plan to question the claim that exactly two choices remain. The president hasn't shown why the other approaches are unavailable.
What we’re looking for
The flaw question should target that unsupported restriction. Accepting that declining profits are a problem doesn't require accepting the president's complete list of solutions.
Working the answers
- A
We can understand the president's aim of keeping the company alive without an argument about whether its past survival has been good. Even granting that goal, the proposed restriction to two options still needs support. A doesn't identify the gap between needing to act and having only these actions available.
- B
The president is considering how to avoid bankruptcy, not saying that declaring it is the only available action. Reducing expansion or eliminating some operations are offered as ways to head off the financial problem. The flaw is the allegedly complete list of ways to stop falling profits, not a failure to consider avoiding bankruptcy at all.
- C
The president attributes this year's low profits to decreased demand. That doesn't imply decreased demand is the only possible cause of lower profits in every case. Costs could rise in another situation without contradicting this explanation. C replaces a particular cause with an exclusive general rule.
- D
A small further decline is compatible with the warning. Profits are already very low, and the president says the company may have to declare bankruptcy if the situation continues. Nothing rules out a slight decline. In any event, the size of a possible decline wouldn't establish that the two proposed responses are the only ones.
- ECorrect
There may be other ways to stop the fall in profits. The president moves from an urgent financial problem to a claim that only reducing expansion or eliminating operations can address it. Our product, advertising, and other cost possibilities show what remains unexamined. We aren't proving those alternatives will save the company; we're identifying what the president hasn't ruled out.
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