Q22

 
kcozen
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Q22

by kcozen Sat Nov 30, 2013 5:29 pm

Could someone please explain this one to me. I guess I can't grasp why E is correct.
 
valjohnson948
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Re: Q22

by valjohnson948 Sat Nov 30, 2013 6:48 pm

I had trouble with this at first, too. But after rereading the first part of the third paragraph (lines 25-28), E makes sense. The passage says that "a large business an achieve larger scale and hence LOWER costs than a small business." So, E says "there are higher training costs and increased turnover." E would undermine that.
 
christine.defenbaugh
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Re: Q22

by christine.defenbaugh Wed Dec 04, 2013 2:31 pm

Great question, kcozen! And fantastic breakdown valjohnson948!

This inference question requires us to do a bit of work before we dive into the answer choices. In order to undermine the author's connection between size and monopoly power, we first need to know what that connection is! To the passage we go!

valjohnson948 gets the the jackpot in the sights when focusing on lines 25-28. The connection the author makes between size and monopoly power is that a bigger size "creates a natural tendency toward monopoly" - in other words, size causes monopoly power! The author supports this connection with the idea that the larger the business, the larger the scale, the more specialized the workers can be, and therefore the lower the costs.

To undermine this connection between size and monopoly power, we need something that breaks the other direction - something that suggests that larger size does NOT necessarily lead to monopoly power. (E) does exactly that. This answer suggests that for certain businesses, increasing specialization (i.e., size/scale) and therefore increasing productivity does not necessarily lead to overall cost savings. As a result, it would not necessarily lead to greater monopoly power for those businesses!

(E) undermines the connection by introducing a situation that doesn't match the pattern outlined in the passage.


Missed Connections
(A)
This suggests that a smaller firm can exert monopoly power, but the small firm is only doing so in the regions where the larger competitors are missing. Perhaps those smaller firms are still the biggest in their region?

(B)
The fact that the workers themselves are not able to get as good a salary does not suggest a loss of monopoly power. In fact, this could support the author's connection by showing that as specialization increases, business costs (worker pay) goes down.

(C)
There's no comparison here between larger and smaller businesses, so there's no way to undermine the connection between size and monopoly.

(D)
The fact that exactly when increasing returns begin varies does not undermine the fact that they exist, nor the idea that as a general connection, the larger the business the more monopoly power they can exert.



On complex inference questions such as this, it's imperative that we understand the basis for the question before attacking the answer choices. This will often require going back to the passage to mine it for more specific or robust information, as it did here. Use that information to guide you through the answer choices.

Please let me know if this completely answers your question!