PrepTest 137, Section 4, Question 4
An economist has argued that consumers often benefit(52 more words not shown)
Which one of the following,(7 more words not shown)
- AThe benefits to(28 more words not shown)
- BThe government's permitting(27 more words not shown)
- CIf a corporation(30 more words not shown)
- DEven if a(19 more words not shown)
- EIf obtaining a(21 more words not shown)
Reading the argument
A company could use its extra money to help customers. Will it?
I can imagine a consumer benefit from a very large delivery business: better infrastructure might let me order detergent from my couch and receive it the next day. Convenience is a real benefit. So I'm willing to consider the economist's claim that allowing a monopoly could sometimes help consumers.
But follow the proposed path. With competition gone, the company can charge more and spend less on advertising. That leaves extra money available for research and infrastructure. Available isn't the same as invested. What if the company simply keeps the extra profit or gives it to shareholders?
What we’re looking for
For a strengthener, I'd initially want a reason to believe that the extra money really will produce benefits for consumers. The argument describes what the company could afford to do; I want help connecting that opportunity to an actual benefit.
Working the answers
- A
This says research and infrastructure are especially beneficial uses of the money. It doesn't tell us that the company will choose those uses. Even identifying the best way to spend the money doesn't establish that customers will receive the benefit the economist predicts.
- B
This gives a requirement for a monopoly to benefit consumers: some investment benefits must reach them. But it doesn't establish that the requirement is met. Saying 'this helps only if the benefits reach customers' leaves us still asking whether those benefits will reach customers.
- CCorrect
This addresses another problem we should notice: the company is charging customers higher prices. Even if the investments help them, is that help worth the added cost?
C says yes. The advantages from the extra investments outweigh the disadvantage of the higher prices. That gives us the overall consumer benefit the economist needs. Instead of merely saying the company has extra money or could make useful investments, C connects the monopoly's investments to a gain that more than makes up for its price increase.
- D
Some investment without a monopoly doesn't establish a benefit from allowing one. The economist's proposal concerns extra research and infrastructure that the company couldn't otherwise afford. D doesn't tell us whether allowing the monopoly produces those additional benefits for consumers.
- E
Look closely at what the company will inevitably do: raise prices and reduce advertising spending. Those actions leave it with more money, but they don't say what happens to that money next. If E instead guaranteed investment that benefited customers, it would address our concern. As written, it stops before the missing step.
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