Evaluate the argument

[miteshsholay]

Company X experienced a significant loss of market share over a number of years. To strengthen its market position, the company decided two years ago to increase the percentage of total revenue devoted to research and development. The following year, the company's market share increased by 10 percent. In response, company management further increased the amount of money devoted to research and development.

Which of the following investigations is most likely to yield significant information that would help evaluate whether the company's decision to further increase the research and development budget was warranted?
A)Determining how many new products the company has created over the past year

B)Determining the percentage of revenue that other companies devote to research and development

C)Determining whether any of the company's competitors have withdrawn from the market in the past two years

D)Determining the maximum percentage of revenue that the company can devote to research and development without affecting the company's production budget

E)Determining whether all of the company's new products have fared equally well in the marketplace

OA: C
My Concern :
Even if any of the competitors of the company have withdrawn from the market, that doesn't necessarily mean that the market share of the company will increase only because of that reason.

Lets suppose that in 2000 - Total competitors=X,Y,Z

2001-Company increase the percentage of total revenue devoted to research and development.
lets say that at the same time Z opted out of market.

How are we supposed to assume that the increase can be attributed to Z's opting out of the market. It could very well be due to just change in R&D policy.

When we consider the other extreme i.e. when none of the competitors withdrew, even then the increase in X's revenue could be attributed to R&D policy.

This means the reason for revenue increase in both the extreme cases can be attributed to R&D. This kind of deviates from the general answer choice of an Evaluate question in which both the extreme cases should provide polar opposite answers.

Please clarify whether the reasoning I provided is appropriate.

[jlucero]

In almost all strengthen/weaken/evaluate arguments, your goal will not be to PROVE that a conclusion is right/wrong, but to find something that leads us closer to knowing the conclusion. You are correct- there are absolutely some scenarios in which competitors could drop out of the market and the company's market share remains unaffected. However, C is more important to determine the validity of the conclusion than any other, because there are other scenarios where this could account for the company's increase in market share.

[miteshsholay]

Thanks for the clarification Joe. I used to think that these kind of answers (strengthen/weaken/evaluate) will absolutely do their purpose beyond doubt, without any exceptions. I do realize now that I must also consider that they can have minor assumptions and all we need is to check that they are better than the other choices.

[jnelson0612]

:-)

[LinaFahmi]

Could someone please provide further clarification for answer E for this question?

Answer E "Determining whether all of the company's new products have fared equally well in the marketplace"

Would it be too much of a stretch to assume that the recent R&D led to the production of the new products. If all the new products did well in the marketplace, then that means that further investment into R&D is warranted?

Thanks!

[jnelson0612]

Could someone please provide further clarification for answer E for this question?

Answer E "Determining whether all of the company's new products have fared equally well in the marketplace"

Would it be too much of a stretch to assume that the recent R&D led to the production of the new products. If all the new products did well in the marketplace, then that means that further investment into R&D is warranted?

Thanks!

The best way to handle a question like this, evaluate the conclusion, is to look at the argument as a whole and then see which answer makes the biggest impact on the conclusion.

Here the argument might be:
Conclusion: The R&D increase caused the increase in market share.
Why?
Premise: The company had been losing market share for years. It increased R&D by 10%. The next year, market share increased.
Assumption: There was no other cause for this increase (this is usually the assumption in a causal argument).

You can see that answer choice C can make a huge difference here.
C says to investigate whether competitors left the marketplace.
--If they did, then that weakens our argument. It gives another reason why market share increased. The increase may not have been due to the increased R&D.
--If they didn't, and the normal competition is there, this strengthens the argument. It removes a possible cause for the increase in market share.

Check out E in that context. Does E really matter? Do we care if ALL the products have fared equally well in the marketplace? This company may have 1,000 products. What if 1 did well, and 999 didn't, but the 1 that did well is the bulk of the company's business. What if half did well and half didn't? Who cares?

What we really need to do is find something that helps us determine if the assumption is true, that there was no other cause for this increase. C is the one that helps us.