Self-study
An economist has argued that Conclusion consumers often benefit when government permits a corporation to obtain a monopoly. ███████ ████████████ █ ███████████ ███ █████ ██████ ███████ ████████ ██████ ██ ████ ██ ████████████ ███ ███████████ ███ ████ ██████ ███ █████ █████ ██ █████████ ████████ ██ ██████████ ██████████████ ████ ██ █████ ███ █████████ ███████ ███████ ███ ██████ ██ █████ ███████████ ██ ██ ██████████
Summarize Argument
The economist concludes that consumers often benefit when the government allows a corporation to have a monopoly. She supports this by saying that without competition, the corporation can raise prices and spend less on advertising. The savings can be invested in research or infrastructure, which can then benefit consumers.
Notable Assumptions
The economist assumes that corporations with a monopoly often will use their savings to invest in beneficial research or infrastructure, rather than spending it on things that don’t benefit consumers. She also assumes that other costs of monopolies, like higher prices or fewer options, won't outweigh the benefits of research and infrastructure.
4.
Which one of the following, ██ █████ ████ ███████████ ███ ███████████ █████████
a
The benefits to █████████ ███ █████████ ███████ ██ █ ███████████ ███████ ██ █████████ ████████ ██ ██████████ ██████████████ ████ ██ ████ ███████████ ██████ ███ ████ ██████ ██ █████ ██ ███ █████ ████
This reestablishes the fact that research and infrastructure do benefit consumers, but it fails to address whether companies will actually invest their savings into these things. It also fails to address whether these benefits outweigh the costs of monopolies.
b
The government's permitting █ ███████████ ██ ██████ █ ████████ ██ ████████████ ███ █████████ ████ ██ ████ ███████████ ██████ ███ ██████ ██ ██ █████ ████ ██ ███ ███████████ ██ ██ ██████████
This shows that monopolies benefit consumers only if the corporation shares the results of its investments. However, it doesn't address whether these benefits outweigh the costs of monopolies or whether companies will actually invest in helpful research and infrastructure.
c
If a corporation ███████ █ █████████ ███ ████████████ ██ █████████ ██ ███ ██████ ██████ ████ ██ ██████████ ██ ███ ██████████ ████ █████ ███████████ ██ █████████ ████████ ██ ██████████ ██████████████ ████ ██ ████ ████████████
This suggests that some monopolies will indeed benefit consumers because the advantages of research and infrastructure will outweigh the cost of higher prices.
d
Even if a ███████████ ██ ███ █████████ ██ ██████ █ █████████ ██ █████████ ███████ ████ █████ ██ █████████ ████████ ██ ██████████ ███████████████
Irrelevant. The economist's argument is about corporations that are allowed to have a monopoly. The fact that other corporations invest in research or infrastructure doesn't tell us whether monopolies will do the same.
e
If obtaining a ████████ ███████ █ ███████████ ██ █████ ███ ██████ ███ ██████ ████ █████ ██ ████████████ ████ ███████████ ████ ██████ ██████████ ██ ███
Even though the corporation will almost certainly raise prices and spend less on advertising, this doesn't tell us if it will then invest the savings into research and infrastructure or if the benefits of those investments will outweigh the costs of monopolies to consumers.