Critical Reasoning

Technological improvements and reduced equipment costs have made converting solar energy directly into
electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power
(that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more
economical than new oil-fired power plants) is unchanged at thirty-five dollars.
Which of the following, if true, does most to help explain why the increased cost-efficiency of solar power has
not decreased its threshold of economic viability?
(A) The cost of oil has fallen dramatically.
(B) The reduction in the cost of solar-power equipment has occurred despite increased raw material costs
for that equipment.
(C) Technological changes have increased the efficiency of oil-fired power plants.
(D) Most electricity is generated by coal-fired or nuclear, rather than oil-fired, power plants.
(E) When the price of oil increases, reserves of oil not previously worth exploiting become economically
viable.

Can someone please explain ?

IMO A

OA?

nik08 wrote:Technological improvements and reduced equipment costs have made converting solar energy directly into
electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power
(that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more
economical than new oil-fired power plants) is unchanged at thirty-five dollars.
Which of the following, if true, does most to help explain why the increased cost-efficiency of solar power has
not decreased its threshold of economic viability?
(A) The cost of oil has fallen dramatically.
(B) The reduction in the cost of solar-power equipment has occurred despite increased raw material costs
for that equipment.
(C) Technological changes have increased the efficiency of oil-fired power plants.
(D) Most electricity is generated by coal-fired or nuclear, rather than oil-fired, power plants.
(E) When the price of oil increases, reserves of oil not previously worth exploiting become economically
viable.

Can someone please explain ?

Though I could be wrong, I would bet B.
Though A, would be a good reason for continuing to use oil instead of solar, I think it is outside the scope of the argument. This argument is dealing with the threshold of the Solar Engergy. I believe a change in the price of oil, whether up or down would change the threshold of adoption for Solar Energy, but the argument explicitly states that the threshold has remained the same. This logic also rules out choice E, as well.
I don't think it is C or D, either since they don't provide a good explanation of the threshold for Solar Energy, just outside thoughts.

B, rationale, if the price of the materials increased that would offset a drop in the threshold from efficiency. To me, it is the only one that seems like it would be capable of negating the effect of the increased efficiency.

i was trying to choose between A anc C, and chose A instead because that option specifically mentions costs whereas C mentions simply 'efficiency' which doesn't always result in cost savings.

would love to know the answer to this one.

IMO C, efficiency always translates into cost saving ..

aslo question is "why the increased cost-efficiency of solar power has
"
so I will bet on C

nikhil,

efficiency can be time savings too i.e. higher productivity, or lower machine breakdowns...

Mpalmer22 wrote:B, rationale, if the price of the materials increased that would offset a drop in the threshold from efficiency. To me, it is the only one that seems like it would be capable of negating the effect of the increased efficiency.

IMO: A

(B) the cost of materials is out of scope, the passage is about efficiency between oil and solar power.

(D) and (E) are also out of scope.

I was between (A) and (C), and eliminated (C). As someone else mentioned, oil efficiencies could mean anything, machinery, time, productivity etc. In the end, (C) is out of scope too.

What is the OA?

I am going to give it a shot:

Evidence:

T.I. and R.E. --> cost efficient electricity for solar powers.

Conclusion:

solar energy costs remain the same as tradition oil.

If TI and RE reduce the costs of solar energy, there must be some increasing costs related to solar powers in order to have such conclusion. Otherwise, the costs of oil is not the same as solar energy.

I would choose B.

Answer is clearly C

gmat009 wrote:Answer is clearly C

Care to provide your reasoning why it's "clearly" C?

From TestMagic Forums:

The OA is C, and the reasoning:

First, we are talking about the economic viability of using solar power instead of "oil power." To make this determination, we would have to make a cost/benefit comparison for both solar power and "oil power." So let's say that at one time, it cost $100 to produce 100 kilowatts of power using solar power, but only $35 for "oil power." We can say that $100 is a kind of "even point," or as GMAT is calling it, a "threshold." I.e., when that much oil starts costing $100, we can switch to solar power. (We could also say that when the cost of solar power drops to $35, we could switch, too. Doesn't matter which way we do this, though.)

Now, let's say that solar power has become more efficient, and we can now produce 200 kilowatts of power for $100, but the "threshold" is still $100. Why? Well, I'm guessing that since I've set this question up this way instead of the way GMAT has set it up, you will say that "oil power" can now also produce 200 kilowatts of power for $100, right? Right, and this is answer choice C--"oil power" has also become more efficient.

Okay, now this would be the normal way to make this calculation, but GMAT is throwing a monkey wrench into the equation. Instead of making simple comparison between cost/benefit ration of each, GMAT is doing something like this--comparing the cost/benefit of solar power with the energy released from one barrel of oil. So, with the old explanation in mind, let's revise it a bit. Let's say that it takes a certain amount "investment" into solar power to produce 100 kilowatts of power using solar energy, and it takes one barrel of oil (instead of $100 worth of oil) to achieve the same result. If it costs $100 for the solar power, then the "break even point," or "threshold" for the cost of the oil would be $100. In other words, when one barrel of oil costs $100 or over, it makes economic sense to switch over. So you see that the actual cost of the oil has nothing to do with the "break even point;" that point is determined solely by how much the solar energy costs. And this is what ETS is trying to say with its explanation about "Actual oil prices control how far, given the viability threshold, solar power is from economic viability but do not figure in the determination of the threshold." (Translation: If we look at the price of oil, we can see whether we're close to the break even point, but this price isn't involved in the cost of solar power.)

Okay, let's see why we might miss this question and where we may have erred. First, I think if we read this question quickly, and don't think about it too deeply (as we unfortunately find we often must in a testing situation), we might think that the question is asking us something like So why do people still use "oil power" instead of solar power? In which case, it would be very easy to choose answer choice A. But we should be sure to read the question carefully; the question isn't asking about why solar power is still not economically viable, but rather why the threshold is the same. This question is a bit different, I think you'll agree.

I still feel C should be the answer.