Help for O.G. 38

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yvonne0923: Senior | Next Rank: 100 Posts; Posts: 96; Joined: Mon Mar 07, 2011 8:43 pmFollowed by: 1 member; Thanked: 1 times

by yvonne0923 » Fri May 27, 2011 2:58 pm

Which of the following best completes the passage below?

The computer industry's estimate that it loses millions of dollars when users illegally copy programs without paying for them is greatly exaggerated. Most of the illegal copying is done by people with no serious interest in the programs. Thus, the loss to the industry is quite small, because _________.

(A) many users who illegally copy programs never find any use for them
(B) most people who illegally copy programs would not purchase them even if purchasing them were the only way to obtain them
(C) even if the computer industry received all the revenue it claims to be losing, it would still be experiencing financial difficulties
(D) the total market value of all illegal copies is low in comparison to the total revenue of the computer industry
(E) the number of programs that are frequently copied illegally is low in comparison to the number of programs available for sale

___________________________________________________________________________________________________

I am confusing with the explanation at the back of the O.G book, according to the explanation "the industry's loss due to illegal copying of programs must be evaluated in terms of the sales lost;", what kind of situation is this, can you make a more specific example to explain this? Since from my point of view, illegal copying will make the loss of industry, no matter if these people who illegally copying these programs are interested in them or not.

Can anyone explain?

Thanks.

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Source: Beat The GMAT — Critical Reasoning | Fri May 27, 2011 2:58 pm

cans: Legendary Member; Posts: 1309; Joined: Mon Apr 04, 2011 5:34 amFollowed by: 123 members; Location: India; Thanked: 310 times; GMAT Score:750

by cans » Fri May 27, 2011 4:43 pm

Is the OA B??

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yvonne0923: Senior | Next Rank: 100 Posts; Posts: 96; Joined: Mon Mar 07, 2011 8:43 pmFollowed by: 1 member; Thanked: 1 times

by yvonne0923 » Fri May 27, 2011 6:26 pm

cans wrote:Is the OA B??

Yeah, but why B?

according to the explanation "the industry's loss due to illegal copying of programs must be evaluated in terms of the sales lost;", what kind of situation is this, can you make a more specific example to explain this? Since from my point of view, illegal copying will make the loss of industry, no matter if these people who illegally copying these programs are interested in them or not.

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cans: Legendary Member; Posts: 1309; Joined: Mon Apr 04, 2011 5:34 amFollowed by: 123 members; Location: India; Thanked: 310 times; GMAT Score:750

by cans » Fri May 27, 2011 9:10 pm

the industry's loss due to illegal copying of programs must be evaluated in terms of the sales lost

Why illegal copying of programs will lead to losses?
Ans - Because if people can have programs for free, they won't buy them. Thus Illegal copies affect the sales.
Now option B is (B) most people who illegally copy programs would not purchase them even if purchasing them were the only way to obtain them
Thus even if only original programs were available, sales will increase only by a small amount and thus loss due to illegal copies is quite small.

Ex - Suppose we have a calculator s/w by company ABC available with price $40 in the market.
ABC company estimates that if 1000 people get access to illegal copy, loss will be $40,000 (because these people wont buy and thus loss in sales..)
But if we know that of the 1000 people, 900 people wont buy the s/w at any cost, it means if there were only original copies available, only 100 (=1000-900) people will buy the s/w and thus loss = $4000, instead of $40,000. ($4000 is relatively small as compared to $40,000)

I hope you get it.. If you have any further doubt, you can ask again..

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akshatmikku: Junior | Next Rank: 30 Posts; Posts: 22; Joined: Tue Jul 20, 2010 7:53 pm

by akshatmikku » Sat May 28, 2011 3:30 am

So here is my explanation for this question -
B says most people who illegally download are not gonna buy your program anyways , so from the question stem if these guys go ahead and illegally copy programs without paying for it , it doesn't really make much of a difference to the company's sales and hence losses will be minimized
So ans is B -
Further analysis of the question -( no need for this !)
( "MOST people" implies that company will still incur some loss)

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yvonne0923: Senior | Next Rank: 100 Posts; Posts: 96; Joined: Mon Mar 07, 2011 8:43 pmFollowed by: 1 member; Thanked: 1 times

by yvonne0923 » Sat May 28, 2011 12:55 pm

cans wrote:
the industry's loss due to illegal copying of programs must be evaluated in terms of the sales lost
Why illegal copying of programs will lead to losses?
Ans - Because if people can have programs for free, they won't buy them. Thus Illegal copies affect the sales.
Now option B is (B) most people who illegally copy programs would not purchase them even if purchasing them were the only way to obtain them
Thus even if only original programs were available, sales will increase only by a small amount and thus loss due to illegal copies is quite small.

Ex - Suppose we have a calculator s/w by company ABC available with price $40 in the market.
ABC company estimates that if 1000 people get access to illegal copy, loss will be $40,000 (because these people wont buy and thus loss in sales..)
But if we know that of the 1000 people, 900 people wont buy the s/w at any cost, it means if there were only original copies available, only 100 (=1000-900) people will buy the s/w and thus loss = $4000, instead of $40,000. ($4000 is relatively small as compared to $40,000)

I hope you get it.. If you have any further doubt, you can ask again..

Thanks. But I just want to make sure if I understand this correctly.
In the second case you mentioned,

But if we know that of the 1000 people, 900 people wont buy the s/w at any cost, it means if there were only original copies available, only 100 (=1000-900) people will buy the s/w and thus loss = $4000, instead of $40,000. ($4000 is relatively small as compared to $40,000)

it means these 900 people will not have any other ways to obtain the calculators if they won't purchase them. According to the O.G. problem, most people who won't purchase the program will not able to copy it neither (since it states that ...even if purchasing them were the only way to obtain them ). In this case, the loss will be relatively small.
Am I on the right track?

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cans: Legendary Member; Posts: 1309; Joined: Mon Apr 04, 2011 5:34 amFollowed by: 123 members; Location: India; Thanked: 310 times; GMAT Score:750

by cans » Sat May 28, 2011 8:17 pm

Yup

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yvonne0923: Senior | Next Rank: 100 Posts; Posts: 96; Joined: Mon Mar 07, 2011 8:43 pmFollowed by: 1 member; Thanked: 1 times

by yvonne0923 » Sat May 28, 2011 8:56 pm

cans wrote:Yup

Thank for your post!

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sivaelectric: Master | Next Rank: 500 Posts; Posts: 439; Joined: Sat Aug 09, 2008 8:32 amFollowed by: 28 members; Location: India; Thanked: 34 times

by sivaelectric » Sat May 28, 2011 10:06 pm

Thanks for the explanation Cans.

If I am wrong correct me

, If my post helped let me know by clicking the Thanks button

.

Chitra Sivasankar Arunagiri

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sivaelectric: Master | Next Rank: 500 Posts; Posts: 439; Joined: Sat Aug 09, 2008 8:32 amFollowed by: 28 members; Location: India; Thanked: 34 times

by sivaelectric » Sat May 28, 2011 10:07 pm

Thanks for the explanation Cans.

If I am wrong correct me

, If my post helped let me know by clicking the Thanks button

.

Chitra Sivasankar Arunagiri

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