Let’s try to unpack this difficult, poorly-written GMAT Focus Critical Reasoning question.
Imagine that we run the provincial government. The national government pays us a subsidy for every long-distance call that comes into our region. Hence, the more calls that pass through our region, the more money we make.
Right now we have a good arrangement—but perhaps not enough calls are being made due to costs: there is (likely) a charge for such calls in many locations. When the corporation offers to make all long-distance calls "going into the province" free in exchange for 50% of subsidies, this could make financial sense for the province if there is an over 100% increase in calls, due to the fact that they are not free in many places (but not necessarily in the province itself...more on this in the next paragraph). We would be giving away 50% of our subsidies, but calls would perhaps more than double, resulting in increased profits.
Choice A is not a necessary assumption—but
...
Imagine that we run the provincial government. The national government pays us a subsidy for every long-distance call that comes into our region. Hence, the more calls that pass through our region, the more money we make.
Right now we have a good arrangement—but perhaps not enough calls are being made due to costs: there is (likely) a charge for such calls in many locations. When the corporation offers to make all long-distance calls "going into the province" free in exchange for 50% of subsidies, this could make financial sense for the province if there is an over 100% increase in calls, due to the fact that they are not free in many places (but not necessarily in the province itself...more on this in the next paragraph). We would be giving away 50% of our subsidies, but calls would perhaps more than double, resulting in increased profits.
Choice A is not a necessary assumption—but
...
Statistics : Posted by mcelroytutoring • on 25 May 2022, 00:30 • Replies 10 • Views 6398
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