A critic claimed that a business that neither manufactures nor sells d

QUESTION

A critic claimed that a business that neither manufactures nor sells directly is doomed because it is forced to compete exclusively on price. Which of the following is the best criticism of this argument?

A) It ignores the fact that improvements in wholesaler efficiency are relatively easy to duplicate.
B) It fails to demonstrate that traditional retailing businesses are also in jeopardy.
C) It fails to recognize the possibility that wholesalers can add value to different partners in the supply chain.
D) It does not specify how wholesalers can reduce costs most effectively.
E) It does not account for the fact that wholesalers need to be large in order to take advantage of economies of scale.

ANSWER

Answer: C
Explanation: C) Wholesalers can provide more than efficient transportation. For example, they can provide market insights, they can bear risk, and they can help with financing. But the critic ignores all of these, as Choice C indicates. Choice A points out a strength of the critic’s claim, not a weakness. Choices B and D are things that the critic does not do, but neither is important to the critic’s point. Choice E also suggests a weakness of wholesalers, which would not be a criticism here.