Which of the following observations, if true, strengthens the CEO’s ar

QUESTION

Which of the following observations, if true, strengthens the CEO’s argument?

A) Profits would come from support, maintenance, and sale of applications that are compatible with the operating system.
B) Customers frequently complain about the number of bugs in the initial releases of operating systems.
C) The promised technology behind the new operating system is considered by users and beta testers to be far ahead of existing products.
D) A large percentage of target customers are from nations with a poor history of intellectual property protection, where pirated software is easily available.
E) Pursuing a higher market share through cutting prices would force the company to incur large losses.

ANSWER

Answer: A
Explanation: A) The CEO is in favor of an aggressive market penetration strategy in order to gain market share, even if it means pricing at a level at which the company would lose money on every sale. That sounds like a money loser, but if Choice A were true, then the company could make up for lost revenue from the operating system by charging for the new applications. Choice B, if anything, weakens the argument because a price penetration strategy would cause bugs to be seen by more people. Choice C weakens the argument because charging a very low price is not a good idea if the new product is seen as a must-have by users. Choice D suggests that a large percentage of consumers will opt for the pirated version; trying to target them with a low price won’t work if they can get the software for free. Choice E makes the disadvantage of a low price sound even worse, which wouldn’t help the CEO’s case.