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by aj5105 » Fri Oct 31, 2008 12:47 pm
In the United States, the Postal Service has a monopoly on first-class mail, but much of what is sent first class could be transmitted electronically. Electronic transmittal operators argue that if the Postal Service were to offer electronic transmission, it would have an unfair advantage, since its electronic transmission service could be subsidized from the profits of the monopoly.
15.Which of the following, if each is true, would allay the electronic transmittal operators’ fears of unfair competition?
(A) If the Postal Service were to offer electronic transmission, it could not make a profit on first-class mail.
(B) If the Postal Service were to offer electronic transmission, it would have a monopoly on that kind of service.
(C) Much of the material that is now sent by first-class mail could be delivered much faster by special package couriers, but is not sent that way because of cost.
(D) There is no economy of scale in electronic transmission—that is, the cost per transaction does not go down as more pieces of information are transmitted.
(E) Electronic transmission will never be cost-effective for material not sent by first-class mail such as newspapers and bulk mail.
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by codesnooker » Fri Oct 31, 2008 1:19 pm
IMO (A).

It's better if you can post your doubt too as that requires less effort to post the detailed answer.
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by aj5105 » Fri Oct 31, 2008 11:25 pm
I couldn't comprehend the argument.If some one can break it up in simpler terms,would be helpful.

thanks.
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by dmateer25 » Sat Nov 01, 2008 9:14 am
aj5105 wrote:I couldn't comprehend the argument.If some one can break it up in simpler terms,would be helpful.

thanks.
The argument states that: electronic transmittal operators argue that if the Postal Service were to offer electronic transmission, it would have an unfair advantage, since its electronic transmission service could be subsidized from the profits of the monopoly.

The electronic transmittal operators are saying that the postal service can use the profits from the first class mail to subsidize costs of the electronic transmission service.

However, the stimulus says: In the United States, the Postal Service has a monopoly on first-class mail, but much of what is sent first class could be transmitted electronically.

The question stem asks us to allay the electronic transmittal operators’ fears of unfair competition.


Looking at answer choice A:
Now if you know that most of the first class mail can be sent electronically then the post office isn't going to be able to make any profit from the first class mail because much of it will be sent by electronic transmittal. Therefore, they will not be able to subsidize the cost of the electronic transmittal service with first class mail profits and there is NO unfair competition.
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by peter.p.81 » Wed May 11, 2016 3:16 am
I believe the correct answer should be A.
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