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Company A and Company B both produce gold watches. Company A's watches are more expensive than those sold by Company B. Therefore, the watches produced by Company A are of a higher quality than those produced by Company B.
The argument is flawed primarily because the author
The second premise already tells us that Company A's watches are more expensive than B's. Therefore, it doesn't really matter what the exact prices of the watches are. Knowing that Company A's watches cost $1000 while Company B's cost $500 wouldn't make the argument more logical.
The argument does not mention any other kind of watch at all. Therefore, it cannot be said that the author has assumed anything about gold watches in relation to other types of watches.
The argument concentrates on a comparison between Company A and Company B's watches. The author's conclusion involves these two companies alone and is, therefore, not general at all.
The statement that Company A's watches are more expensive than Company B's is, in fact, the second premise of the argument. A premise is a fact that we rely on to be true. Therefore, it does not need any further support.
The author's error is a faulty assumption that because something costs more, it is of better quality. This assumption can be defined as an incorrect relationship between price and quality, as stated by this answer choice.