LR Question 4 Explanation
QUESTION TEXT: Carol Morris wants to own a majority of the shares of…
QUESTION TYPE: Paradox
PARADOX: Analysts predict that Morris will own the daily, even though the majority shareholder refuses to sell.
ANALYSIS: The question stem reads like a strengthen question, but this is really a paradox.
Use your common sense for this question. The majority refuses to sell. So Morris can’t buy the shares. Unless the majority is somehow forced to sell. I saw that was the only possibility, and looked for it in the answers.
___________
- Who cares about other newspapers. We only care about the Daily.
- The stimulus said that Azedcorp has refused to sell. Presumably a high price won’t sway them. Also, this offer was in the past, and the stimulus says that Azedcorp refused all offers.
- It doesn’t matter who is buying. Azedcorp has refused to sell.
- That’s great for Morris. But there can only be one majority owner. Currently, Azedcorp has a majority. Morris therefore needs at least some of Azedcorp’s shares to form a majority.
- CORRECT. If Azedcorp is forced to sell its shares, then Morris will be able to buy them.
Recap: The question begins with “Carol Morris wants to own”. It is a Paradox question. To practice more Paradox questions, have a look at the LSAT Questions by Type page.
More Resources for Paradox Questions
- Intro Course lesson: This intro course lesson covers Paradox questions.
- Mastery Seminar lesson: This LR Mastery seminar lesson covers paradox questions.
About b: “Also, this offer was in the past, and the stimulus says that Azedcorp refused all offers.” But how can we be sure that this offer was in the past? B says that Morris has >recently< offered much more, so we could think that this might lead azedcorp to change its opinion and sell its shares.
I chose E and wouldn't choose B because, in comparison, E is stronger, but B is still bothering me.
There’s a couple issues with B.
One is that you’re right, we don’t know the exact timeline of whether this recent offer is included in the stimulus’ statement that Azedcorp has steadfastly refused to sell (imo Graeme was a little too determinative in stating that the offer was for sure in the past). So it could be the case that this recent offer is newer and much more lucrative than the ones they refused. But even if that was the case, there’s no information to suggest that a higher offer would sway them.
Importantly, B doesn’t actually tell us how Morris’ offer compares to the past offers Azedcorp has received. We don’t actually know how lucrative it is compared to the ones they refused. Even if it’s much more than what Azedcorp paid, it may be more, less or similar to offers they’ve received in the past.
Another thing to consider is that you can generally assume that offers for a majority share of a company, especially where the majority shareholder, has refused to sell, needs to be more than they paid. Again, we have no indication how profitable The Daily is, but if the majority shareholder is consistently refusing to sell, it’s probably profitable. So any offer that would be accepted would necessarily need to be more than they paid, so it doesn’t help this prediction much. (Compared to something like E, which explicitly tells us their financial incentives).
A lot of these things are based on assumptions, but show different aspects of why B is a weak answer. It leaves too much room to interpret in different ways, and many of those are negative interpretations that don’t help us reach the prediction that Morris will soon be owner.
Hope that helps! Let me know if you have further questions.