Innovations in production technology and decreases in the

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Innovations in production technology and decreases in the cost of equipment have made recycling paper into new paper products much more cost-efficient over the last twenty years. Despite these advances, though, the "point of price viability" (the price that new paper made from trees must reach to make recycled paper comparable in price) is unchanged at $2.12 per ream of paper.

Which of the following, if true, most explains why the increased cost-efficiency of recycled paper has not lowered the point of price viability?

(A)The cost of unprocessed trees to make new paper has fallen dramatically.
(B)The decreases in the cost of recycling equipment have occurred despite increases in the cost of raw materials required to manufacture such equipment.
(C)Innovations in production technology have made it much more cost-efficient to produce new paper from trees.
(D)Most paper is made from the scraps and sawdust left after processing new trees for lumber, rather than directly from the trees themselves.
(E)When the price of planting new saplings to replace cut trees becomes more expensive, forests reserves not previously worth cutting become cost-effective to cut.
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by deloitte247 » Sat Jul 28, 2018 11:10 am

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Option A - INCORRECT.
The cost of unprocessed trees to make new papers has increased, that is why the cost of recycled paper has not lowered the point of price viability despite the innovations technology.

Option B - INCORRECT.
Price viability has not be adequately profitable despite the decreases in the cost of recycling equipment due to the increases in the cost of raw materials required to manufacture such equipment.

Option C- INCORRECT.)
Innovations in production technology have made it much more cost-efficient to produce new paper from recycled paper rather than the traditional way of producing new papers from tress.

Option D - INCORRECT.
The increased cost efficiency of recycled paper has not affect ''price viability'' despite the comparison in price of paper made from the scraps and sawdust left after processing new trees for lumber, rather than directly from the trees themselves.

Option E - CORRECT.
Despite the innovations of technology and cost efficiency of recycled paper into new paper products, it has been unable to lower the ''point of Price Viability''. Meanwhile, most consumers at the point of purchase can differentiate quality and price difference of a recycled paper into new paper from a new paper made from tress. However, the price of planting new saplings to replace cut trees becomes more expensive, forests reserves not previously worth cutting become cost-effective to cut and this lead to the ''point of price viability''.