LSAT 134 | Section 2 | Logical Reasoning: Q4

LR Question 4 Explanation

QUESTION TEXT: Editorialist: In a large corporation, one of the functions …

QUESTION TYPE: Strengthen

CONCLUSION: The president of a company has a duty to keep their profits high.

REASONING: One of their jobs is to promote the key interests of the shareholders.

ANALYSIS: The two key ideas are: (1) promoting shareholders’ interests and (2) keeping profits high.

You and I may be able to understand, economically, why those are related. But they’re not the same thing and you can’t treat them as such when it comes to LSAT arguments.

So there’s a missing step. Why does promoting shareholders’ interests mean keeping profits high?

The argument assumes that keeping profits high helps advance the shareholders’ important interests.

Without that link, the conclusion doesn’t follow.

For example, if shareholders cared more about long-term growth, environmental responsibility, or stable employment than short-term profits, then the president wouldn’t necessarily have a duty to maximize profits.

___________

1. This weakens the argument, if anything. It suggests shareholders’ interests are not always tied to high profits, making the conclusion less convincing.
2. This tells us who shares the responsibility. The argument’s gap is about what those interests are, not who is responsible for them.
3. CORRECT. This provides the missing link. If keeping profits high advances shareholder interests, then it makes sense that the president has a duty to keep profits high. That’s because one of his jobs is to promote shareholders’ interests.
4. This talks about potential shareholders, not the corporation’s current shareholders. It also suggests profitability isn’t the only important factor, which doesn’t strengthen the argument.
5. This doesn’t help connect shareholders’ interests to profits. The president can have many duties and still have a duty to keep profits high.