Cable tv

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Cable tv

by imskpwr » Thu Sep 13, 2012 3:54 am
When cable TV consumers evade cable access fees by purchasing illegal "pirated" cable boxes, a vicious cycle results. The use of pirated cable boxes by consumers forces cable companies to raise rates, which, in turn, leads more consumers to purchase pirated cable boxes in order to receive free cable programming.

The cycle described above could not result unless which of the following were true?

An increase in cable TV rates causes some consumers to cancel their service or reduce the number of premium channels to which they subscribe.

Some methods for detecting and disabling pirated cable boxes are effective at forcing pirated cable TV consumers to pay user fees or forgo cable TV programming, although the success rates vary considerably.


When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they do not adequately account for revenue that will be lost through pirated cable use.

No one who routinely uses illegal pirated cable boxes can be induced by lower cable access fees to stop using pirated cable boxes unless fines for the use of such boxes are raised at the same time.

Cable TV consumers do not differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes.

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by vk_vinayak » Thu Sep 13, 2012 7:37 am
If the cable TV management, before establishing the cable fees, takes into account the revenue loss due to pirated cable, then they (Cable TV management) wont increase the cable fees because of revenue loss due to pirated usage. This will stop the vicious cycle. Ans is C.
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by whats_in_the_store » Fri Sep 14, 2012 9:47 am
Am quite confused, if executives are not taking into consideration losses due to pirated access, why are they increasing the access price?

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by GMATGuruNY » Fri Sep 14, 2012 10:43 am
This CR mimics one from GMAT Prep. Check my explanation here:

https://www.beatthegmat.com/when-people- ... 00056.html
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by imskpwr » Fri Sep 14, 2012 6:11 pm
vk_vinayak wrote:If the cable TV management, before establishing the cable fees, takes into account the revenue loss due to pirated cable, then they (Cable TV management) wont increase the cable fees because of revenue loss due to pirated usage. This will stop the vicious cycle. Ans is C.
How have you narrowed down the options?

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by vk_vinayak » Sun Sep 16, 2012 6:40 am
imskpwr wrote:
vk_vinayak wrote:If the cable TV management, before establishing the cable fees, takes into account the revenue loss due to pirated cable, then they (Cable TV management) wont increase the cable fees because of revenue loss due to pirated usage. This will stop the vicious cycle. Ans is C.
How have you narrowed down the options?
I had seen a similar question (maybe the one that Mitch referred) and recognized the pattern.
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by vinodsundaram » Mon Sep 17, 2012 2:32 am
When cable TV consumers evade cable access fees by purchasing illegal "pirated" cable boxes, a vicious cycle results. The use of pirated cable boxes by consumers forces cable companies to raise rates, which, in turn, leads more consumers to purchase pirated cable boxes in order to receive free cable programming.
Raising rates -> more ppl to use pirated CBs -> Raising rate (cycle)


The cycle described above could not result unless which of the following were true?
(something if doesnt happen, breaks the cycle.. More like an assumption ques)

A. An increase in cable TV rates causes some consumers to cancel their service or reduce the number of premium channels to which they subscribe. (If they cancel or don't cancel, the cycle will still exist)

B. Some methods for detecting and disabling pirated cable boxes are effective at forcing pirated cable TV consumers to pay user fees or forgo cable TV programming, although the success rates vary considerably. (success rate varying, can cause/ not cause the cycle. out)


C. When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they do not adequately account for revenue that will be lost through pirated cable use.
(If they had created a buffer amt for the loss thru, Pirated cables, no cycle will be created)

D. No one who routinely uses illegal pirated cable boxes can be induced by lower cable access fees to stop using pirated cable boxes unless fines for the use of such boxes are raised at the same time.
(this is abt ppl who routinely use pirated ones. lowering rate will nt impact them, as they will continue to use pirated ones.)

E. Cable TV consumers do not differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes. (Irrev param)


IMO C