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#37374
Complete Question Explanation

Must Be True. The correct answer choice is (E)

The shareholder objects to the company’s move into the food services industry because of its
inherent volatility and risk. The risk is higher than with pharmaceuticals, another area into which the
company has considered expanding.

Since your understanding of comparative vs. absolute claims is frequently tested on the LSAT, we
can expect that the correct answer choice will address the comparison between the financial risks
posed by the company’s expansion into either type of industry.

Answer choice (A): While the company’s future operations may require increased funding, given that
a move into food services would siphon off funds needed by these operations, there is no evidence
suggesting that the company’s present operations require an increase in funding.

Answer choice (B): Investment into pharmaceuticals has a lower inherent risk than the food service
industry. Whether it would siphon off money from other operations is unclear given the information
provided.

Answer choice (C): This answer choice is too extreme. There is no evidence that the author can
predict with absolute certainty that the company will lose money as it expands into the food service
industry. Make sure to differentiate between possibility, probability, and certainty in answering Must
Be True questions.

Answer choice (D): Again, this answer choice contains an exaggeration. The author clearly prefers
expanding into pharmaceuticals. However, there is no proof that such expansion is necessary (“only
if”) for increased profits. In fact, the issue of profits was never discussed in the stimulus.

Answer choice (E): This is the correct answer choice. Since the food services industry has a
higher inherent risk than pharmaceuticals, it is reasonable to conclude that the company has a greater
chance of losing money by investing in food services than in pharmaceuticals. This answer choice
contains the proper comparison between the two types of investments, which can be proven using the
information contained in the stimulus.
 Juanq42
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  • Joined: Jul 21, 2019
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#67493
I got immediately thrown off by the mention of a "time proven success" at the beginning of the stimulus. Reading through the explanation, I noticed the drawbacks to the food service industry, but I did not recognize that the shareholder objected to the move. Can someone translate into simpler terms what the first sentence meant? Thanks!
 James Finch
PowerScore Staff
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#67514
Hi Juan,

All that the first sentence means is that the current operations that the company engages have been historically successful and likely to be successful in the future. The point of the shareholder stating this is that these are known to be profitable things to do, unlike the more volatile food service or pharmaceutical industries.

Hope this helps!

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