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Question #7: Must Be True. The correct answer choice is (E)
The stimulus indicates that Baxe Interiors is a very large design company with a near monopoly on
corporate design business. It also indicates that other, smaller companies may offer better designs,
but that corporate managers prefer to do business with very large companies that are unlikely to go
bankrupt. This implies that design quality is not necessarily the most important factor for an interior
design company to have a near monopoly in the corporate market.
Answer choice (A): While it is certainly possible that there are other very large design companies
beside Baxe, there is no support for this conclusion in the stimulus. For example, if other large
companies existed, why would Baxe maintain a near monopoly? Also, since other large companies
are not mentioned here, we cannot inferior anything about the quality of their designs.
Answer choice (B): All three sentences in this stimulus refer to design work in the corporate market.
While the stimulus explains why Baxe maintains a monopoly in this market, it does not offer any
reason to believe that Baxe also does not dominate other market categories.
Answer choice (C): Although the stimulus indicates that several small design companies have
produced award-winning designs and Baxe has not, we cannot overgeneralize here. It is not
necessarily true that most small companies produce designs superior to those of Baxe or even that
most designs from the award-winning companies are superior.
Answer choice (D): We have no basis for this belief from the stimulus. Corporate managers may or
may not be aware of the existence of superior designs (also, the phrase “much better” is a red flag),
but there desire to work with financially stable companies could outweigh their desire for the best
Answer choice (E): This is the correct answer choice. We know that at least some of the designs
from several small companies have been deemed superior to any of those from Baxe Interiors. We
also know that Baxe currently holds a near monopoly on the corporate market and one possible
explanation for this monopoly. Together, these statements support this answer choice.