Critical Reasoning

Due to high jet fuel costs, airline carriers are looking for new ways to increase revenues and thereby counteract declining profits. Airline A has proposed increasing the number of passengers that can fit on its airplanes by creating several standing room only "seats" in which passengers would be propped against a padded backboard and held in place with a harness. This proposal, since it relates to passenger safety, cannot be implemented without prior approval by the Federal Aviation Administration.

The above statements, if true, indicate that Airline A has made which of the following conclusions?
A.The addition of standing room only "seats" will generate more revenue than the cost of ensuring that these seats meet safety standards.
B.The Federal Aviation Administration will approve Airline A's specific proposal.
C.The revenue generated by the addition of standing room only "seats" is greater than the current cost of jet fuel.
D. There are no safer ways in which Airline A can increase revenues.
E. Passenger safety is less important than increasing revenue.

Please explain choice A and C.

Oh 2 minutes....that has been my problem

any way i think its A

As you say i also agree it was between A and C
but
for C
We can think as 'fuel is not the only determinant' of the profit or the cost.There is chance that even though revenue from added seats may be higher than current cost of fuel,the company may not be able to make profit because of some other determinants of cost and profit may not change.
So it is only part of whole thing.
So A

I also agree that the answer should be A.

P1: Due to high jet fuel costs, airline carriers are looking for new ways to increase revenues and thereby counteract declining profits.
P2: Airline A has proposed increasing the number of passengers that can fit on its airplanes by creating several standing room only "seats".
P3: This proposal, since it relates to passenger safety, cannot be implemented without prior approval by the Federal Aviation Administration.

The above statements, if true, indicate that Airline A has made which of the following conclusions?

This is a tricky one. The passage is a set of premises and does not contain a conclusion. NOTE: We are not being asked to provide a conclusion to the passage. We are being asked for a conclusion that the airline has made in formulating their plan. In my opinion this is another way of asking for an assumption.

It would seem that, in order for the airline to consider this plan, it would have to come to two conclusions (or assumptions). We need to pick an answer choice that identifies one of these.

1) The airline has to believe that the revenue generated from the extra seats will be greater than the additional cost of jet fuel.
2) The airline has to believe that the costs of implementing the plan are not greater than the extra revenue generated.

Answers (A) and (C) refer to these conclusions (assumptions). Let's look at each one.

A. "The addition of standing room only "seats" will generate more revenue than the cost of ensuring that these seats meet safety standards". Correct. This refers to the second conclusion mentioned above. If the cost of implementing the new seats is greater than the revenue generated then the airline would not be pursuing this plan. This answer states a conclusion that the airline must have already reached.

C. "The revenue generated by the addition of standing room only "seats" is greater than the current cost of jet fuel". Incorrect. This answer seems to refer to the first conclusion. The reason I don't like this answer is because it refers to the "current" cost of jet fuel. The "current cost" can refer to two things. It can mean the total current amount the airline spends on jet fuel or it can mean the current price of jet fuel. In either case, this is not the information that the airline needs in order to pursue their plan. The airline needs to know that the additional revenue will be greater than the additional cost.

This is a ticky question to indetify question stem.

If we go as stated meaning of conclusion - Inference - most likely will fall in trap.

Thank @ rkanthilal

Actually, now that I think about it let me make an adjustment to one point of my explanation. Assumptions are connected to passages that have conclusions. Since this passage does not have a conclusion it's incorrect of me to refer to the answer choices as "assumptions".

The question stem is asking you to infer what the airline believed when they proposed this plan. In other words, "what does airline need to believe in order for this plan to solve their problem of "declining profits"?"

Sorry for the confusion...

The question stem is asking you to infer what the airline believed when they proposed this plan. In other words, "what does airline need to believe in order for this plan to solve their problem of "declining profits"?"


Now what airline need to believe for this plan to solve the problem : It is stated that " Due to Due to high jet fuel costs, airline carriers are looking for new ways to increase revenues and thereby counteract declining profits".

And therefore Airline A has proposed increasing the number of passengers.

Now logically what airline A intend to show that "The revenue generated by the addition of standing room only "seats" is greater than the current cost of jet fuel"

as mentioned by @rkanthilal that cost of jet fuel has dual understanding : It can mean the total current amount the airline spends on jet fuel or it can mean the current price of jet fuel.

I disagree with @rkanthilal, therefore , cost of fuel and price of fuel is equally distinct in understanding.

IMO B. .

Expert please throw some light.

SmarpanGamt wrote:The question stem is asking you to infer what the airline believed when they proposed this plan. In other words, "what does airline need to believe in order for this plan to solve their problem of "declining profits"?"


Now what airline need to believe for this plan to solve the problem : It is stated that " Due to Due to high jet fuel costs, airline carriers are looking for new ways to increase revenues and thereby counteract declining profits".

And therefore Airline A has proposed increasing the number of passengers.

Now logically what airline A intend to show that "The revenue generated by the addition of standing room only "seats" is greater than the current cost of jet fuel"

as mentioned by @rkanthilal that cost of jet fuel has dual understanding : It can mean the total current amount the airline spends on jet fuel or it can mean the current price of jet fuel.

I disagree with @rkanthilal, therefore , cost of fuel and price of fuel is equally distinct in understanding.

IMO B. .

Expert please throw some light.

I actually find sense in both A and B - both are conclusions without which A's proposal doesn't make much sense, or will not achieve it's desired result of increasing revenues. I would probably go with A, because it is closer to the desired result of increasing revenues, than a generic statement that the proposal is "implementable" but I can find no real fault with B - which is why the question isn't very good, IMHO.

In any case, C goes too far: let's say that A's revenues were $200 per month, out of which it had to pay fuel costs of $100. If the cost of fuel ran up to $150, the airline is still making a profit - just not as much profit as it was making before. In that case, any increase in revenues (which exceeds the costs of making the change) will achieve the stated desired result of 'increasing revenues and counteracting declining profits": I don't need the stand-up positions to cover the entire fuel costs ALONE. In other words, C demands that revenues from "standing" positions have to be >$150 (the price of fuel), which is going too far. If the new stand-up positions only add $20 to the revenues (after costs of implementing the proposal), the situation is already better than before, as revenues have incrased to $220 and profits have increased as well.

Geva@MasterGMAT wrote: I can find no real fault with B

Geva, can you please explain why there is no real fault with B ?
There are no premises, which can lead to a conclusion that B states. How come FAA approve without testing for safety measures ? Nothing is mentioned about safety.

Thanks.

beat_gmat_09 wrote:

Geva@MasterGMAT wrote: I can find no real fault with B

Geva, can you please explain why there is no real fault with B ?
There are no premises, which can lead to a conclusion that B states. How come FAA approve without testing for safety measures ? Nothing is mentioned about safety.

Thanks.

The key is in the tricky phrasing of the question: not "which conclusion can we reach from the premises", but "given that A makes this proposal, which conclusion A must have reached?"

You are right that we cannot know that the FAA will approve - B is not a conclusion WE can reach from the premises. But it is definite a conclusion airline A MUST reach before it even considers the proposal. Although the airline know they will have to push this crazy idea through the FAA (this is given in the argument), A are still making the proposal to put people standing up in a plane. In order to make the proposal and stand behind it, the airline must assume (=reach the conclusion) that any differences with the FAA will eventually be worked out - otherwise, the proposal isn't feasible and even considering it doesn;t make sense.
Understand this - although the question uses "conclusion" the way in which it uses conclusion makes this an assumption question, not an inference one. I am looking for an answer which is a necessary conclusion that A must reach before making the proposal. If B is not true, and the FAA will not approve this stupid, idiotic, moronic idea, then why are A even proposing it? Thus, B is a necessary assumption - a conclusion that A must have made if the above premises hold true.

I would still have chosen A, but I'm saying that it's not clear cut - which is why I doubt this question has come from any official source.

Geva@MasterGMAT wrote: In order to make the proposal and stand behind it, the airline must assume (=reach the conclusion) that any differences with the FAA will eventually be worked out - otherwise, the proposal isn't feasible and even considering it doesn;t make sense.
Understand this - although the question uses "conclusion" the way in which it uses conclusion makes this an assumption question, not an inference one. I am looking for an answer which is a necessary conclusion that A must reach before making the proposal. If B is not true, and the FAA will not approve this stupid, idiotic, moronic idea, then why are A even proposing it? Thus, B is a necessary assumption - a conclusion that A must have made if the above premises hold true.

I agree with you on - "Thus, B is a necessary assumption"
But how can it be a "conclusion that A must have made if the above premises hold true."
Had this question been about assumption then B could be true, but i am not getting the conclusion part.
I mean the safety standards haven't passed yet, there cannot be any stand on whether FAA will approve A's plan. What if the safety tests fail, then the conclusion is not true. As far as my knowledge goes, one has to stick to the information given in the argument.
"Will" in option B makes statement B probable, but how much probable to make the argument strong enough that B can be derived as a conclusion from the set of premises ?
I am getting confused between this conclusion and assumption part. I know this might not be a question from a official source, but i'm curious.

Go back to what the question is asking:
The above statements, if true, indicate that Airline A has made which of the following conclusions?

what are the statements, which we take as true?

1) Revenues are falling, profits declining.
2) A is proposing to fly people standing up, in the hope that this will increase revenue
3) The proposal must be approved by FAA

If I take the statement that "A is proposing the plan at all" as true, this indicates that A believes that the FAA part will sort itself out - that A MUST have reached the conclusion that that the proposal will be approved, otherwise why propose the plan in the first place?

B is not derived from the set of premises - it is a conclusion that A must have reached in order to even propose. It is still quite possible that A are wrong in their conclusion and the FAA will kick this thing out the window. But in order to consider the proposal at all, A must have reached the conclusion that it will work out.

Whether this answer is asking for an assumption or conclusion is something that I brought up and later adjusted in my earlier post. Let me add a couple thoughts here. Geva and everyone else, please comment if you disagree with anything below.

My point here is that this question is in fact an "Inference" question and NOT an "Assumption" question. It can be turned into an assumption question, but we should not do this.

QUESTION STEM: The above statements, if true, indicate that Airline A has made which of the following conclusions?

We are taking this question one step further than we are asked to. We are assuming that the airline has come to the conclusion that their plan will be a success. When we do this the answer choices become assumptions to this conclusion "the plan will be a success". In this case both (A) and (B) could be correct. Both (A) and (B) must be true for the airline to believe that they will be successful with their plan.

If this is what we are supposed to do then I believe the question stem would have looked a little different. For example, "If Airline A believes that their plan will succeed, the which of the following is an assumption they must make?"

This is obviously different from what we are asked. We are asked for a conclusion the airline must have made in order to propose their plan. In my opinion, they only need to conclude that their plan will increase profits. Answers (A) and (C) refer to this. As discussed in my earlier post, I believe (C) is incorrect because it refers to the "current" cost of fuel. The focus should be on additional revenue and additional cost. Answer (A) has the perspective of additional revenue vs. additional cost, so in my opinion it is correct.

What about (B)?

It is not necessary for the airline to believe that the "Federal Aviation Administration will approve Airline A's specific proposal". They most likely believe that there is a high probability that the FAA will approve the plan. But they don't need to be 100% certain in order to propose the plan. In fact, unless the system is fixed, there is no way a company can come to the conclusion that they will be approved with 100% certainty. In my opinion, this answer is too strong.

Answer (B) is only correct if we take the question stem one step further, as mentioned above, and assume that the airline has already concluded that they will be successful. If we answer the question stem as it is presented, I believe (A) is the only answer that makes sense.