GMAT Critical Reasoning
Shelby Industries manufactures and sells the same gauges as Jones Industries. Employee wages account for forty percent of the cost of manufacturing gauges at both Shelby Industries and Jones Industries. Shelby Industries is seeking a competitive advantage over Jones Industries. Therefore, to promote this end, Shelby Industries should lower employee wages.
Which of the following, if true, would most weaken the argument above?
- A Because they make a small number of precision instruments, gauge manufacturers cannot receive volumediscounts on raw materials.
- B Lowering wages would reduce the quality of employee work, and this reduced quality would lead tolowered sales.
- C Jones Industries has taken away twenty percent of Shelby Industries' business over the last year.
- D Shelby Industries pays its employees, on average, ten percent more than does Jones Industries.
- E Many people who work for manufacturing plants live in areas in which the manufacturing plant they work for is the only industry.
Correct Answer: B