#23 - The constitution of Country F requires that whenever

[Francis O'Rourke]

Hi mN2,

There is one aspect of answer choice (C) that you may be missing. According to this situation:

• The government must sell PetroNat.
• World oil company has made an offer for PetroNat

It seems like you are assuming that the government will make the deal with World Oil, but we ca not confirm this. The government can decline the offer from World Oil. If the government declines this offer, are you confident in saying that one of the conditions would be violated?

Answer choice (E) does say that the price the country sells StateRail for would be lower than the price that StateRail could otherwise get without restrictions on who can buy it, that is on the open market. The jump from 'without restrictions' to 'on the open market' is a bit difficult to see, but I think that we can interpret open market to mean open to all interested parties.

This answer choice explicitly tells us that there are higher bidders, since these restrictions would "reduce the price." This creates a real dilemma for the government if it wants to sell StateRail: the government can either get the highest open market price or ensure that citizens retain majority ownership for at least one year.

[barbara123456]

Hi,
I narrowed it down to B, C, and E.
I understand why E is correct and why C is incorrect, but why is B incorrect if it never addresses the price at which the state-owned entity was sold for?

[Jeremy Press]

Hi barbara,

You answered your own question! Since answer choice B doesn't address the price at all, we cannot tell for sure whether, under the scenario described in that answer, the government will (or will not) violate the "highest price" requirement. It's entirely possible that the scenario in answer choice B will eventually permit the government to sell the entity "for the highest price it can command on the open market." We need an answer in which the government "must violate" at least one of the requirements. Answer choice B is an answer where the government might not have to violate either requirement.

I hope this helps!

[goingslow]

Hi!

The second requirement is that "it MUST ENSURE that citizens of Country F will have majority ownership...". (C) uses the wording "cannot determine" - isn't that the opposite, and hence negation, of "must ensure"?

Thank you very much!

[Robert Carroll]

goingslow,

That's all immaterial. Francis's post above discusses the issue with answer choice (C). There is no indication in answer choice (C) that the government will be accepting World Oil Company's offer. It's not necessarily the highest - it is "one of the highest." So the government may not accept it, and the issue about the impossibility of determining ownership wouldn't arise, as the sale to World wouldn't happen.

Robert Carroll

[goingslow]

Thanks Robert!

[quan-tang@hotmail.com]

I am not convinced E is the correct canswe.

The stem says 'can command on the open market', emphasis on 'can'. And the 'can' means it does not require the goverment to sell it at absolute highest possible price imaginable, just what it can under circumstances.

restriction reduces how much the company can be sold for, but it nonetheless is still the price it can commend on the open market.

It would only contridict if government can sell the company at a price, but it chose to sell it at a lower price.

[Paul Popa]

Hi Quan,

I would argue that because the government can receive a higher offer for StateRail if they dropped the restrictions they're placing on the purchase, they're not selling it for the highest price they can command on the open market. They can sell it for more if they wanted to, but because of restrictions they're placing on the sale, they won't be, thus violating the constitution. So essentially, they're between a rock and a hard place: if they sell it with restrictions, they won't get the highest price for it, thus violating the constitution, but if they don't place those restrictions on it, they can't guarantee that the citizens will have a majority ownership. But if they continue with the restrictions, they are definitely violating the constitution. Hope this helps!