resolve the paradox

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resolve the paradox

by xcusemeplz2009 » Sun Nov 08, 2009 5:02 am
It might seem that an airline could increase profits by reducing airfares on all its flights in order to encourage discretionary travel and thus fill planes. Offers of across-the-board discount fares have, indeed, resulted in the sale of large numbers of reduced-price tickets. Nevertheless such offers have, in the past, actually cut the airline's profits.
Which one of the following, if true, most helps to resolve the apparent discrepancy described above?
(A) Fewer than 10 percent of all air travelers make no attempt to seek out discount fares.
(B) Fares for trips between a large city and a small city are higher than those for trips between two large cities even when the distances involved are the same.
(C) Across-the-board discounts in fares tend to decrease revenues on flights that are normally filled, but they fail to attract passengers to unpopular flights.
(D) Only a small number of people who have never before traveled by air are persuaded to do so on the basis of across-the-board discount fares.
(E) It is difficult to devise an advertising campaign that makes the public aware of across-the-board discount fares while fully explaining the restrictions applied to those discount fares.

how to ensure a fullproof approach.....
i unable to understand any choices being resolving the issue...
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by 2010gmat » Sun Nov 08, 2009 5:50 am
clearly C...

large no. of reduced price tickests were sold --> these would normally have lower profit margin

C says Across-the-board discounts in fares tend to decrease revenues on flights that are normally filled, but they fail to attract passengers to unpopular flights.

So, the efforts to attract more passengers in order to increase the revenue and hence the profit have failed...passengers are attracted to only those flights that are already full but now they are paying reduced price...so profit goes down...

Key to solve this prob is to take note of the following premise:

Offers of across-the-board discount fares have, indeed, resulted in the sale of large numbers of reduced-price tickets.


we dont know anything about overall ticket sales...

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by raghavakumar85 » Sun Nov 08, 2009 6:01 am
C it is..

the first look at all the answer choices wil let you eliminate A D and E. B may be true in some cases but C perfectly resolves the paradox.

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by gmatmachoman » Sun Nov 08, 2009 6:25 am
C perfectly resolves the paradox.

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by mehravikas » Sun Nov 08, 2009 5:06 pm
I would go with 'C' because it clearly resolves the paradox.

The revenues are decreased on the normal filghts and the unpopular flights fail to attract passangers despite the discounts.

Therefore, you get more passangers but there is a cut in overall profits.

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by Testluv » Sun Nov 08, 2009 7:45 pm
received a pm asking me to post

Hi xcusemeplz2009,

Step one of the Kaplan method tells us to read the question stem. The question stem, here, tells us that it is a paradox or explain question.

Step two is to analyze the stimulus. A paradox just means something unexpected (surprising) happened. You should look for keywords that tell you what the paradox (or surprise) is (yet, but, however, nevertheless, surprise.)

Here, the passage starts with "it might seem." With "it might seem" the author tells us what we should ordinarily expect: that airlines can increase profits by reducing prices (because it's cheaper, more people will fly and profits will grow).

The second sentence tells us why we should expect this (because that's generally what happens).

We don't argue with this. In a paradox question, you're not trying to poke a hole in what the author is telling you (Instead, you have to determine what the unexpected thing (surprise/paradox etc) is.). So, right now, we take it as given that airlines are normally able to boost profits by cutting down the prices of the tickets--that's what ordinarily happens.

But, the third sentence starts off with the important keyword: nevertheless. That means we are about to learn that something unexpected happened: such offers have sometimes actually hurt profits not helped them. So that is the paradox.

Step three is to make a prediction. In paradox questions we don't predicting something specific. Instead, we predict that the right answer will resolve the surprise. In a paradox question, you should have the answers to two questions very clear in your head before you go to the answer choices:

1) What is the paradox (ie, surprise)?

2) Why is it paradoxical (ie, surprising)?

Here, the surprise is that some airlines' profits actually get hurt when they cut ticket prices.

And, it is surprising because, ordinarily, airlines' profits are boosted when they cut ticket prices.

Now, we go through the choices searching for something that will be logically capable of resolving this surprise (Step 4 is match). We are looking for a fact that will make everything in the passage make sense. Say to yourself: "I want an explanation!"

Let's do this:

(A) Fewer than 10 percent of all air travelers make no attempt to seek out discount fares.
Doesn't matter. Instead of resolving the paradox, this choice casts doubt on the idea that cutting prices will boost profits in general. But we were told in the passage that, ordinarily, cutting prices will boost profits. In a paradox question (like in an inference) question, everything in the passage must be true.

(B) Fares for trips between a large city and a small city are higher than those for trips between two large cities even when the distances involved are the same.
This is clearly outside of the scope. In order to even think this choice was relevant we would have to make a bunch of assumptions.

(C) Across-the-board discounts in fares tend to decrease revenues on flights that are normally filled, but they fail to attract passengers to unpopular flights.

So, a certain kind of price-cutting-off the board price cutting can actually hurt profits. Across the board price cutting will fail to attract customers. This is capable of explaining our paradox (that sometimes price-cutting hurts profits), and we are done. (We don't now stop and say: oh but how do I know that the airlines' whose profits were hurt in the passage are doing across-the-board cutting.) The right answer just has to be something that is logically capable of resolving the paradox.

Let me know if either of choices D or E were bothering you!
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by anirudhbhalotia » Wed Dec 15, 2010 12:58 am
I am beginning to like these Paradox questions!

C

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by maddy2u » Mon Dec 20, 2010 5:52 am
xcusemeplz2009 wrote:It might seem that an airline could increase profits by reducing airfares on all its flights in order to encourage discretionary travel and thus fill planes. Offers of across-the-board discount fares have, indeed, resulted in the sale of large numbers of reduced-price tickets. Nevertheless such offers have, in the past, actually cut the airline's profits.
Which one of the following, if true, most helps to resolve the apparent discrepancy described above?
(A) Fewer than 10 percent of all air travelers make no attempt to seek out discount fares. --Positive for carriers.
(B) Fares for trips between a large city and a small city are higher than those for trips between two large cities even when the distances involved are the same. -- Out of Scope
(C) Across-the-board discounts in fares tend to decrease revenues on flights that are normally filled, but they fail to attract passengers to unpopular flights. -- Decreases Profit, yes Correct !
(D) Only a small number of people who have never before traveled by air are persuaded to do so on the basis of across-the-board discount fares. -- This is good news too for Airplane carriers.
(E) It is difficult to devise an advertising campaign that makes the public aware of across-the-board discount fares while fully explaining the restrictions applied to those discount fares. -- Out of Scope

how to ensure a fullproof approach.....
i unable to understand any choices being resolving the issue...
IMO, Answer choice is C. B-) B-)

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by ManKuts123 » Sat Feb 12, 2011 7:03 am
Answer is C

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by Mike1982 » Fri Feb 18, 2011 8:21 am
I say C

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by sanjib.saha » Mon Jun 06, 2011 4:01 pm
this is clearly C
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by mandeepak » Mon Jun 06, 2011 6:10 pm
IMO - C

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by cans » Mon Jun 06, 2011 11:48 pm
imo c
discounts should fill planes.
discounts led to increase in sale of tickets but decreased revenue. why??
a)doesn't explain why revenues decreased.
b)irrelevant
c)this explains why revenue decreased.
d)irrelevant
e)irrelevant
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by coderversion1 » Mon Jul 11, 2011 7:58 am
Question type: identified as resolve the paradox:
Prephrase: " The amount of profit obtained by filling all seats is not greater than the amount when seats were empty and price were higher".
With this thought in mind lets see each answer choice:

A. This option must not be the right answer, what about the other 90 percent, the majority opts for cheaper tickets so it does not address the discrepancy.
B. This does not affect the flaw, its irrelevant.
C. Strong Candidate answer. This answer tells that flights which used to be empty are still empty so the profits have actually gone down, it is kind of restating our prephrase. Lets check for a better answer choice.
D. Although this answer choice tells a small number of people are the only ones persuaded to buy discounted tickets, it fails to give and relation to compare how small is the number of these passengers. Thus not precise enough to be a candidate.
E. If its difficult to devise an advertising campaign i don't know why is airlines experiencing losses. This answer choice assumes that Advertising tough> Low Popularity > Hence low customers. This is too much assumption to be a candidate answer. Especially when we have a better answer (C) already.

Thus, (C) answer.

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by amit2k9 » Wed Jul 13, 2011 12:14 am
C is the only one resolving the issue at hand perfectly.
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