Postage Rates

In my opinion,

conclusion:neither the subcriber nor the advertizer will be lost.

We need to weaken this.

D says,
the total amount spend by advertisers per issue will not change .

The advertisers who have stipulated total number of advertizments per magazine and per issue will look for other magazines to compensate for the number of advertisements pending to be published due to reduction of issues.(as they are gonna keep their spending budget same).

Thus Advertizers will be lost.
This weakens.

IMO D

A does nothing to the argument. Agreed the postal charges will be more than one-third.. at the same time the magzine company probably can use their production costs for the reduced production towards this.

can somebody please explain this?

Detailed explanation:


same amount per issue
so now no of issues have reduced hence the ad income will reduce
so this will make profits to decline

Ex:
now A gives 5 add per issue
total issues = 52
total ads = 52*5

after reduction in no of issues
total issues = 26
total ads = 26*5

so company will lose income from remianing 26*5 ads




Regarding A
new issue will cost 1/3 more to mail
no problem as currently we reducing no of issues by half

Ex:
postage cost per issue rt now = 30
issues = 52

total cost = 52*30

after reduction in no of issues
cost = 30+10 = 40
issues = 26

total cost = 26*40 [which is less than 52*30]
so here profits will increase

thanks for expln,but am still not clear.

This is how i look at it-- Ad guys who wish to x$ for 52 issues now spend the same x$ for 26 issues.How does this reduce the profit?

aj5105 wrote:thanks for expln,but am still not clear.

This is how i look at it-- Ad guys who wish to x$ for 52 issues now spend the same x$ for 26 issues.How does this reduce the profit?

its written that a typical issue will cost more
"a typical issue" tells us that the cost is given for an issue and not the whole cost

Answer is clearly D here.