Logic Breakdown

Passage Summary: Even though small design companies are winning awards for being the best, big companies like Baxe get all the contracts because managers are afraid small companies will go broke.

Reasoning: Managers only hire design firms they believe are financially stable, and they believe only large firms meet this criteria, despite small firms winning more awards.

Analysis: This stimulus sets up a logical chain: hiring requires a belief in stability, and stability is only attributed to large size. Therefore, small firms—no matter how talented or decorated—are effectively locked out of the market by these managerial perceptions. Look for an answer that synthesizes these facts to explain why Baxe maintains its monopoly or why the award-winning small firms are failing to secure contracts. It’s a classic 'perception vs. reality' scenario where the managers' beliefs dictate the outcome.

Passage Stimulus

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7.

The statements above, if true, most strongly support which one of the following?

Correct Answer
E
Managers’ belief that only very large firms are safe to hire keeps business away from small award-winning firms, so the existence of superior designs does not threaten Baxe’s near monopoly.
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