Mr. Blatt: Expert consultants are sought after by management because they help executives make better decisions. That...

Skylar October 5, 2019

@tomgbean Happy to help! Let's take a look.

First, let's breakdown the given information. Mr. Blatt claims that expert consultants are worth the substantial fees they charge because they help executives make better decisions. Ms. Fring claims that expert consultants are not hired for that reason, but instead to take the responsibility away from executives. She goes on to state that the more the expert consultant costs, the more they can be blamed.

So we have two different given positions as to the reason expert consultants are hired. The question asks us to find an answer choice that strengthens the latter position.

Answer choice (C) states "A successful firm of expert consultants seeks to increase its volume of business by reducing its fees, but its volume of business drops." In other words, a firm of expert consultants reduced their fees and saw a resulting drop in business. This connects directly to Ms. Fring's statement that "the more the experts cost, the more they can be blamed when things go wrong." In this case, they cost less, so they can be blamed less, so demand and business for them drops. Therefore, (C) strengthens Ms. Fring's position and is correct. We see that (C) does not strengthen Mr. Blatt's argument because, if consultants were hired primarily to help make better decisions, we would expect demand to increase with a reduction in price.

Does this make sense? Please let us know if you have additional questions.

Nikki37 November 9, 2019

Still don't understand how you jumped from the more an expert consultant costs the more they are to blame TO expert consultants seeking to increase its volume of business by reducing its fees but its volume of business drops.

shunhe January 6, 2020

Hi @Nikki37,

Thanks for the question, this can be a bit confusing. Normally, when a good or service costs less, we would expect the amount of it bought to go up. This is what the classic economics supply-demand curve tells us, and makes sense intuitively. If there's a sale on MacBooks and they're $200 off, we'd expect Apple to sell more MacBooks. In this case, the expert consulting firm is decreasing its price, but it's getting LESS business. If Mr. Blatt is right, more executives should be hiring them, since they're being hired to help executives make decisions, and they're offering the same service for a lower price. But less executives are hiring them, and this is consistent with Ms. Fring's explanation. Ms. Firing says that the more experts cost, the more they can be blamed when things go wrong, and that expert consultants are hired to have someone to blame. Based on that logic, the less experts cost, the less they can be blamed when things go wrong, and if the experts cost less, we'd expect to see them hired less, since the whole point of hiring them was to have someone to blame, and we can't blame them as much if they're less expensive. This is what actually happens - the expert consultants' fees dropped, and less people hired them. Thus, it suggests that Ms. Fring's position is more aligned with the truth than Mr. Blatt's. Hope this helps!

AdaobiN February 4, 2021

@shunhe Thank you! This actually makes sense : ).

Chloe June 22, 2023

I'm confused how blame plays a part in answer C

Emil-Kunkin June 24, 2023

Hi, blame only plays an indirect part in C. We are told that F thinks that the higher the cost, the easier it is to blame people. If it were true that demand falls as price falls, it would suggest that the thing that clients really value in consultants was their high price, not their advice. This supports the idea that people like the fact that their high price makes it easier to blame them, which is the real reason for hiring consultants in the first place.

July 8, 2024

The explanations here were very helpful with seeing why there would be a drop in the hiring of the consultants if their price went down, if the reason for their hiring was, in fact, that they take the blame for the executives, but I still couldn't see how cheaper consultants couldn't be blamed anymore because they were cheap, until I actually imagined a table in the boardroom with consultants, executives, and others, after a bad decision was made, and somebody's attempt to blame the cheap consultants. It wouldn't work. "You can't blame Joe (the consultant) for this fiasco! You hired the cheapest consultant on the market, what did you expect?!" ...Imagination helps :)

Emil-Kunkin July 16, 2024

I love this! I really do think that imagining the situation as described, and if possible putting yourself in the shoes of the actors can really help to not only understand the situation and argument, but to critically evaluate it.