Critical Reasoning

Because of the rising costs of gasoline, a small bus company has decided to decrease the number of weekend trips it runs to a nearby metropolitan area by one third. It will not lose any riders, because the decreased number of trips is adequate for the existing number of weekend riders. The company will save substantially on fuel costs and will have one fewer driver working on weekends. Moreover, the bus company will continue to raise revenue through print advertising inside the bus and on the bus ' s exterior.

Which of the following if true, provides the strongest evidence that the bus company ' s profits are likely to decrease if the company implements the plan?

Many of the weekend riders would continue riding the bus even if the fare was increased.

Most of the advertisers will continue to spend the same amount on advertising per mile and the displaced weekend driver will not earn more by switching to a weekday route at the company.

The displaced weekend driver will earn the same salary driving on weekdays and the advertisers will increase their advertising on the weekend.

Maintenance costs per bus will remain constant.

The increased cost of fuel increases the operating costs of one round trip by twenty per cent.

I got this correct, but I have a question with correct choice, which I will ask once all fellas solve this CR. I will post OA later

imo B

advt/mile is the same. As# of miles reduce the company receives lower advt revenue...

I thot C earlier. But, on a second thought, B look better.

Is the answer "Most of the advertisers will continue to spend the same amount on advertising per mile and the displaced weekend driver will not earn more by switching to a weekday route at the company." ?

Since number of bus miles have reduced, advertisement revenue per mile will decrease.

I will go with 'B'. Revenue from advt. will decrease as the number of trips gets reduced.

Ok so OA is B. Please explain what is the use of highlighted (in blue) part in B?

Most of the advertisers will continue to spend the same amount on advertising per mile and the displaced weekend driver will not earn more by switching to a weekday route at the company.

and the displaced weekend driver will not earn more by switching to a weekday route at the company.

all this does is to establish that the company wont spend more money on this driver by switching him around -- strengthens the case.

It means that they will loose a driver and this could affect their plans as the company will need to find a replacement, might have to indulge in training costs. Or atleast interim until they find a driver they will have to forgo those weekday trips and thereby loose revenue.

Anyone have a better explanation.

reply2spg wrote:Ok so OA is B. Please explain what is the use of highlighted (in blue) part in B?

Most of the advertisers will continue to spend the same amount on advertising per mile and the displaced weekend driver will not earn more by switching to a weekday route at the company.

what the highlighted part emphasizes is that there wont really be a reduction in driver but that the weekend driver will move to a weekday slot... so there is no saving on the driver costs as predicted by the company

reply2spg wrote:Ok so OA is B. Please explain what is the use of highlighted (in blue) part in B?

Most of the advertisers will continue to spend the same amount on advertising per mile and the displaced weekend driver will not earn more by switching to a weekday route at the company.

If the displaced weekend driver earn more by switching to a weekday route, the employed weekend driver will follow the same option. As a result, the company has to hire weekend driver with higher pay, increasing the cost.

Thanks guys