Air fare

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Air fare

by FINALCOUNTDOWN » Thu Mar 05, 2009 1:10 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 or 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.
Please explain why B is wrong.

C
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Re: Air fare

by karmayogi » Thu Mar 05, 2009 2:10 am
FINALCOUNTDOWN 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.
(B) Fares or 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.
Please explain why B is wrong.

C
Important keywords are marked in Red above.

Now let's analyze. Argument says the airline could increase profits by reducing airfares across-the board. The reduced price will help to fill planes. Filling plane is the key driver of the argument. However, such offers haven’t resulted into increase profit. Which option explains the discrepancy?

A)Only 10 percent don’t make the attempt, what about rest of the 90%. 90% of all air travelers is pretty high.
B)Fare between large cities and small cities is out of scope.
C)Clearly tells why reduction is fare is unable to result in increase in profit. The number of people travelling with the airline is more or less same. Hence, overall the profit has reduced.
D)The idea was not to attract new customers.
E)“an advertising campaign” out of scope.
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by scoobydooby » Thu Mar 05, 2009 2:22 am
to find why profits fell

A) if <10% did not buy discounted tickets, most bought discounted tickets, sales rose. ideally profit should rise and not fall

B) fares between large and small cities > fares between two large cities does not explain how profits fell. we do not have any info on whether people bought more tickets between large-large cities or large-small cities

C) revenue from normal flights fell and unpopular flights did not attract buyers, so revenue most certainly fell. C is better than others

D) discounted fares attracted only a small number of people, so revenue didnt rise much. we cannot say that revene fell

E) difficulty of advertising is out of scope

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by Musicolo » Thu Mar 05, 2009 4:11 am
I went for C because it seemed like the only one with logical connection to the main article.
B is discussing fares between large and small cities, something which is not mentioned in the main article and presents no logical link to the main article.

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by karmayogi » Thu Mar 05, 2009 4:23 am
Musicolo wrote:I went for C because it seemed like the only one with logical connection to the main article.
B is discussing fares between large and small cities, something which is not mentioned in the main article and presents no logical link to the main article.
The trick to excel in CR is to find why some option is wrong? and why other is correct? That means, we need to have explanation to opt in or out any option, even though I also don’t do it religiously &#61514;.
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by bmlaud » Thu Mar 05, 2009 8:16 am
IMO C, it explains the paradox
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by sg1928 » Thu Mar 05, 2009 8:45 am
karmayogi wrote:
Musicolo wrote:I went for C because it seemed like the only one with logical connection to the main article.
B is discussing fares between large and small cities, something which is not mentioned in the main article and presents no logical link to the main article.
The trick to excel in CR is to find why some option is wrong? and why other is correct? That means, we need to have explanation to opt in or out any option, even though I also don’t do it religiously &#61514;.
I agree with you karmayogi. Many a time I feel, opting out an option looks like a faster approach. At the end, we can glance at the left over option and then evaluate.

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by cramya » Thu Mar 05, 2009 7:44 pm
To explain the discrepency look for a choice that reduces revenue(across the board discounts) and does not attract more new customers or passengers to fill planes which was the main reason to think there would be more profit in the first place.

C does that precisely.

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CR

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by mason77 » Sat May 14, 2016 1:27 am
I will go with C