#4 - An economist has argued that consumers often benefit

[Administrator]

Complete Question Explanation

Strengthen. The correct answer choice is (C)

This stimulus begins with the economist’s conclusion, which is supported by three premises.

The economist concludes that consumers often benefit when government permits a corporation to obtain a monopoly. The support for this conclusion is that when a corporation does not have competition, it can raise prices without spending nearly as much on advertising. The corporation can then invest the extra money in expensive research or industrial infrastructure that it could not afford if it faced the costs of competition. Thus, the argument goes, the corporation can pass the fruits of these investments on to consumers.

The weakness in this argument is that the economist assumes that because the corporation can pass the fruits of the investments on to consumers, that it will in fact pass the fruits on. That the economist makes this assumption is clear from the definitive language in the conclusion, that consumers often benefit when government permits a corporation to obtain a monopoly.

In this Strengthen question, your prephrase is that the correct answer choice will provide support for the idea that the corporations actually pass the fruits of their investments on to consumers, so that the consumers benefit from the corporation obtaining a monopoly.

Answer choice (A): This comparison between the benefits of corporate investment in expensive research or industrial infrastructure versus some other investment is irrelevant to the conclusion that the consumer will actually benefit from a corporation obtaining a monopoly despite the concomitant price increases.

Answer choice (B): This choice presents a conditional relationship in which a corporation passing the fruits of at least some of its investments on to consumers is necessary for the government granting the corporation a monopoly to be advantageous to the consumer. However, learning that passing the fruits of investments on to consumers is necessary for the granting of a monopoly to be advantageous to consumers does nothing to support that a corporation will in fact pass the fruits of investment on to the consumers.

Answer choice (C): This is the correct answer choice, because it confirms that the potential net benefit to consumers from the government granting a monopoly to a corporation will actually occur.

Answer choice (D): This choice has no effect on the conclusion, because it relates to what happens when a corporation is not permitted to obtain a monopoly. Unlike this answer choice, in the stimulus the corporation is granted the monopoly.

Answer choice (E): This choice also has no effect on the conclusion, because the conclusion was not about whether the corporation could increase prices without increasing advertising costs, but rather on whether consumers would benefit from how the corporation uses the extra money it gained from the price increase.

[AnnBar]

PowerScore,

I was picked C after debating between B and C. Would you mind explaining why B is incorrect again. I have the given explanation but it has not clicked. The part that most confuses me is:However, learning that passing the fruits of investments on to consumers is necessary for the granting of a monopoly to be advantageous to consumers does nothing to support that a corporation will in fact pass the fruits of investment on to the consumers.

Thank you

[Kristina Moen]

Hi Ann,

"The government’s permitting a corporation to obtain a monopoly is advantageous for consumers only if that corporation passes the fruits of at least some of its investments on to consumers" can be diagrammed as "Monopoly advantageous Passes the fruits of investment to consumers." Here, the conclusion is that monopolies are advantageous. That's what the economist wants us to believe. So putting ANY restriction on when a monopoly is advantageous does not strengthen the argument. If anything, it could even weaken it. For example, if I said "Monopolies are advantageous only if the Neptune aligns with Pluto" or something. Also, to strengthen an argument, you could select something that says "If a premise is true, then the conclusion is likely true." So you'd want the opposite: IF the corporation passes the fruits of investments to its consumers, THEN the monopoly is advantageous.

To address your question about the sentence: "However, learning that passing the fruits of investments on to consumers is necessary for the granting of a monopoly to be advantageous to consumers does nothing to support that a corporation will in fact pass the fruits of investment on to the consumers." Always be aware of the force of language. If I say "I can go to the mall today," does that mean I WILL go to the mall? Not necessarily.

[LSATls]

I chose (E) precisely because of the reasoning provided in the above explanation for choice (C), i.e, because I thought (E) "confirms that the potential net benefit to consumers from the government granting a monopoly to a corporation will actually occur."

The stimulus says that consumers often benefit from monopolies, since, as a monopoly, a corporation can raise money and spend less on advertising, which then allows the corporation to invest in research and infrastructure. But just because becoming a monopoly means a corporation can raise money and spend less on advertising, it doesn't mean they will -- which in turn means we don't know if the consumer will benefit from the corporations' subsequent investments into research and infrastructure. Doesn't (E) strengthen the argument by ensuring that the corporation, if able to raise its prices and spend less on advertising, actually will do it?

[Jeremy Press]

Hi LSATIs,

The problem with answer choice E is that it doesn't go far enough to ensure that the consumers are getting the benefits of the increased prices and decreased investment in advertising. The answer gets us as far as increased prices and decreased advertising investment. But we can't be sure that, upon the occurrence of those two circumstances, corporations will inevitably invest in research or infrastructure (and do so in ways that benefit consumers).

Answer choice C cuts through that possible causal gap by stating that the disadvantage of higher prices "will be outweighed" by the advantages of extra investment in research and infrastructure (allowing us to assume that, in fact, those extra investments will actually be made).

I hope this helps!

Jeremy

[lsattesttaker93]

I don't understand why a corporation can't invest in lower prices? That's how I read (A) and chose it over (C). Or is (C) the better choice because it is more specific here?

[Jeremy Press]

Hi lsattesttaker93,

The primary problem with answer choice A is that it's establishing a comparative advantage (more consumer benefits in monopoly situations than in other situations) when what the conclusion in the stimulus is trying to establish is an absolute advantage ("consumers often benefit," period, no comparison). You see this a lot in Strengthen/Weaken answer choices, so keep an eye on it in future questions.

As you're prephrasing on this stimulus, here's a general scenario you should recognize (they play with this scenario in a lot of contexts!): the author states that some course of action (governments allowing monopolies) is good, purely based on the benefits of that course of action, without considering any of the costs of that action. Since that kind of argument leaves open the possibility of costs that could negate the benefits, a good Strengthen answer will address the "cost" side and show that the costs probably do not negate the benefits. That's what answer choice C is doing here.

I hope this helps!

[cornflakes]

Hi Powerscore,

I arrived at C in this problem because the concept of relative benefit for the consumer from expensive research/infrastructure being greater than relative cost of the higher prices was at top of mind, and obviously an implicit assumption the author made. I selected C because it most addressed the uncertainty around relative benefit and cost of these two items. Looking back at B - I understand why it doesn't necessarily strengthen.

I'm curious as to whether B would suffice if this was a necessary assumption question - if we were to negate the answer, it would read: The government's permitting a corporation to obtain a monopoly is advantageous for consumers even if that corporation does not pass along any (negation of some) of the fruits of its investments to consumers.

Would this weaken the conclusion? It essentially is saying that consumers can derive benefit from the monopoly even if the corporation does not pass along any of the fruits of its investments. To me, this wouldn't necessarily weaken the economist's overall conclusion that consumer often benefit when a monopoly is permitted. The negation actually provides another way for the conclusion to hold, alongside the original rationale.

Any commentary on this hypothetical would be much appreciated - thanks.

[Adam Tyson]

Your negation of answer B is good, cornflakes, but that negation not only doesn't destroy the argument the way a good negated assumption should, but actually strengthens the argument. That's because, as you said, it gives another way for consumers to benefit, which is what the economists claimed.