Logical reasoning PrepTest 140 · Section 1 · Question 22

Incorrect. The argument relies on the threat of renewed competition, not that all of these companies will see competitors reenter the market.

Incorrect. Even if a few companies banded together to drive others out of the market, there would still exist the threat of renewed competition (both from new companies and from the other companies in the cartel).

Incorrect. The argument doesn't rely on only some being able to engage in predatory pricing, just the overall impact of predatory pricing on the market. Even if some medium-sized companies can engage in the practice, the threat of renewed competition might keep prices at a reasonable level.

Incorrect. First, the stimulus relies on prices not rising to unreasonable levels, not on not rising at all. Second, the argument does rely on the threat of competition keeping prices in check, but it doesn't rely on that being the only thing that keeps prices in check. Even if other things keep prices in check, the threat of competition doing so could justify concluding that predatory pricing is acceptable.

Correct. Argument or Facts:
Argument

Valid or Flawed:
Flawed

Question Type:
Strengthen with Necessary Premise

Stimulus Summary:
Predatory pricing: Pricing products so low the competition folds
But after the competition folds, the threat of renewed competition stops prices from becoming unreasonable.
Conclusion: Predatory pricing is acceptable.

Answer Anticipation:
The conclusion here reaches an overall conclusion about the practice—it's "acceptable." The premises never discuss what makes a practice acceptable; instead, it rules out one possible downside of the practice in stating that it doesn't result in unreasonable prices. Therefore, it's relying on that premise establishing that a practice is acceptable.

Answer Explanation:
This answer establishes a rule that allows a conclusion that a practice is acceptable to be drawn, and it applies to predatory pricing. If a failure to lead to unreasonable prices isn't enough to call a practice acceptable, then the argument falls apart since the author has given no other reason to believe that predatory pricing is acceptable.

Key Takeaway:
Conclusions that feature judgments ("morally right," "acceptable," "reasonable," etc . . . ) need a rule establishing how that judgment can be determined. Short of that, the correct answer will likely establish that rule.