PT94.S02.Q20 - Why is the answer C and not D?

avreetj3

I can't figure out why the answer is C! No matter how much I look at it, I gravitate towards D.

mew12

Me either, and I am struggling to find an explanation anywhere on 7Sage!

JY Disciple

Note the cause-effect relationship in these statements; how should you approach it? Like a parallel reasoning question. In the stimulus, there is a financial incentive, which leads to a behavior that results in more overall spending. You are looking for an answer choice with an incentive that leads to something bad. (C) does that even though it goes the opposite way (lower profits). (D) is wrong off the bat because there is no incentive.

Dexterity

The economist's "proposition" is essentially this:

"Having incentive X is worse than not having incentive X, because having incentive X leads to a scenario where each individual tries to get more for themselves, and everyone gets screwed over as a result."

So now, we have to find an AC that has a similar scenario to which we can apply the economist's criticism.

D doesn't have such a scenario. Who exactly has been screwed over here? Money-wise, it looks like everyone just broke even. Plus, someone on PowerScore made a good point - even if the money-pooling scheme caused people to eat more than they used to (which we don't really know,) isn't everyone still getting more food for the same price?

C, however, does have this scenario. In this case, individual salespeople are undercutting each other's prices to make more sales and win the prizes for themselves, and as a direct result, they end up making less than they did before.

Tip: If you can't find an explanation of a question on 7sage, try copying the question and googling it. Odds are you'll find a PowerScore thread that talks about it, and their explanations are helpful (at least for PTs 1-94.)