Logical Reasoning

PT137 · S4 · Q4 An economist has argued that consumers

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An economist has argued that consumers often benefit when government permits a corporation to obtain a monopoly.

Evidence

Without competition, a corporation 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 otherwise afford, passing the fruits of these investments on to consumers.

Conclusion

Consumers often benefit when government permits a corporation to obtain a monopoly.

Evaluate

The economist is quick to point out a potential benefit of letting a corporation obtain a monopoly. But there are likely to be drawbacks as well. The economist mentioned that the corporation would raise its prices.

Do consumers believe the fruits of expensive research outweigh the higher prices? The economist assumes that they do.

4.

Which one of the following, if true, most strengthens the economist's argument?

  1. The benefits to consumers are

    Term Shift

    Spending the money in other ways does not include the benefits to consumers of charging lower prices in the first place.

    14% picked this

  2. The government's permitting a corporation

    Reversal

    This reverses a relationship assumed in the argument.

    4% picked this

  3. Correct

    If a corporation obtains a

    Why this is right

    This provides the Advantageous → Benefit assumption enabling a comparison between the advantages and disadvantages of permitting a corporation to obtain a monopoly.

    Skill tested: Strengthen · how this choice captures the argument's function is the move to repeat next time.

    78% picked this

  4. Even if a corporation is

    Weaken

    This makes it less likely that it is sometimes advantageous to permit a corporation to obtain a monopoly, since extra money is less likely to have as significant an impact on producing fruitful investments.

    0% picked this

  5. If obtaining a monopoly enables

    Out of Scope

    The argument is about whether permitting a corporation to obtain a monopoly is sometimes advantageous for consumers. Whether or not companies are likely to take advantage of opportunities is not relevant to whether those opportunities would benefit consumers.

    4% picked this

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