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by jainrahul1985 » Sat Jul 17, 2010 8:46 am
The Calex Telecommunications Company is planning to introduce cellular telephone service into isolated coastal areas of Caladia, a move which will require considerable investment. However, the only significant economic activity in these areas is small-scale coffee farming, and none of the coffee farmers make enough money to afford the monthly service fees that Calex would have to charge to make a profit. Nevertheless, Calex contends that making the service available to these farmers will be profitable.

Which of the following, if true, provides the strongest support for Calex's contention?

(A) Currently, Caladian coffee farmers are forced to sell their coffee to local buyers at whatever price those buyers choose to pay because the farmers are unable to remain in contact with outside buyers who generally offer higher prices.
(B) In the coastal areas of Caladia where Calex proposes to introduce cellular telephone service, there is currently no fixed-line telephone service because fixed-line companies do not believe that they could recoup their investment.
(C) A cellular telephone company can break even with a considerably smaller number of subscribers than a fixed-line company can, even in areas such as the Caladian coast, where there is no difficult terrain to drive up the costs of installing fixed lines.
(D) Calex bases its monthly fees for cellular telephone service in a given region partly on the cost of installing the necessary equipment to provide the service there.
(E) Calex has for years made a profit on cellular telephone service in Caladia's capital city, which is not far from the coastal region


OA [spoiler]A
I chose B . Please explain[/spoiler]
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by paes » Sat Jul 17, 2010 8:57 am
IMO A

B : B is talking about fixed line equipments, which is not relevamt to the argument.
If this choice can do something then actuallt it can weaken the argument.
It is also saying that 'fixed line companies also think that profit can't be made.
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by ronaldramlan » Sat Jul 17, 2010 9:39 am
Nothing else besides choice A actually supports the conclusion that Calex will have the new cellular service profitable despite the inability of coffee farmers to pay the monthly fees.

A is saying that those coffee farmers, currently unable to afford the planned monthly fees, are forced to sell to local buyers because those farmers cannot contact outside buyers offering higher prices. Therefore, as soon as Calex establishes its cellular network, those farmers will be able to make contact with and sell to outside buyers. Consequently, those farmers will no longer suffer from low prices and be able to afford the monthly service fees.
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by Tommy Wallach » Sat Jul 17, 2010 10:08 am
Hey All,

I was asked by private message to take this on, even though lots of you have already hit the right point. Here we go!

The Calex Telecommunications Company is planning to introduce cellular telephone service into isolated coastal areas of Caladia, a move which will require considerable investment. However, the only significant economic activity in these areas is small-scale coffee farming, and none of the coffee farmers make enough money to afford the monthly service fees that Calex would have to charge to make a profit. Nevertheless, Calex contends that making the service available to these farmers will be profitable.

Conclusion: Service will be profitable
Counter-Premises: NO client can afford the service

At first glance, this looks like a pretty tough argument to strengthen. Calex is arguing that they're going to make money, even though the ONLY people they have to sell to DO NOT HAVE ENOUGH MONEY to afford to make Calex a profit. The ONLY way this could work is if the phones themselves will CREATE more money for the farmers.

Assumption: The phone service itself won't allow the farmers to afford the service at profit-making rates.

Which of the following, if true, provides the strongest support for Calex's contention?

(A) Currently, Caladian coffee farmers are forced to sell their coffee to local buyers at whatever price those buyers choose to pay because the farmers are unable to remain in contact with outside buyers who generally offer higher prices.
ANSWER: Aha! Now the phones themselves CREATE more money. That's a huge strengthen.

(B) In the coastal areas of Caladia where Calex proposes to introduce cellular telephone service, there is currently no fixed-line telephone service because fixed-line companies do not believe that they could recoup their investment.
PROBLEM: Remember, the issue is that the farmers CANNOT pay for the service. It doesn't matter whether or not these people don't have any phones. They can't AFFORD the fees that would make Calex a profit.

(C) A cellular telephone company can break even with a considerably smaller number of subscribers than a fixed-line company can, even in areas such as the Caladian coast, where there is no difficult terrain to drive up the costs of installing fixed lines.
PROBLEM: Comparing to fixed-line is useless.

(D) Calex bases its monthly fees for cellular telephone service in a given region partly on the cost of installing the necessary equipment to provide the service there.
PROBLEM: Sure they do, but we already know that the farmers CANNOT AFFORD to pay the fees that would make Calex a profit.

(E) Calex has for years made a profit on cellular telephone service in Caladia's capital city, which is not far from the coastal region
PROBLEM: These comparison answer choices are NEVER correct. We know nothing about Caladia's capital city.

Hope that helps!

-t
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by arora007 » Sun Jul 18, 2010 9:16 pm
:) Got an A
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by Testluv » Tue Jul 20, 2010 6:37 pm
received a pm.

Tommy already posted a long explanation, so I will be brief.

The conclusion is the last sentence:

"...making the service available...will be profitable."

To strengthen the argument we need to find a fact that renders this conclusion more likely to be true.

Choice A tells us that right now the farmers are at the mercy of the local buyers and that they (the farmers) can get higher prices by getting into contact with outside buyers.

Because we can reasonably conclude that the cell phone service will allow farmers to contact outside buyers, this fact enhances the (prospects of) profitability.

Thus, choice A matches our prediction, and is correct, and because there can only be one correct answer, the Kaplan trained test-taker would stop here, buy time, and earn points.

Choice B tells us that there is a need for phone services. But this doesn't relate to profitability (unless we make unwarranted assumptions).
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