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by akhpad » Tue May 11, 2010 9:51 am
Problem is in image


Image

OA: D

My understanding -
Private college tuition fee Increased => Private college attendance decreased => revenue should decrease
But, Revenue Increased and will further increase

Hence, there should be some source, which contributed to revenue.

D says
Decrease in students attending private college has been more than offset by the increase in tuition.
It does not compensate the losses.

Someone can explain this.
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by debmalya_dutta » Tue May 11, 2010 2:11 pm
based on the passage
evidence 1 - private college rates have increased resulting in the decrease in attendance . So purely based on this evidence , the decreasing attendance in private colleges should have resulted in a certain decrease in the revenue
evidence 2 - the revenue of private colleges have increased in the same period even though the attendance has decreased (based on evidence 1)

How can the revenue increase if attendance decreases ?
if the increase in private college tuition rates compensates the decrease in attendance

Hence option D
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by liferocks » Tue May 11, 2010 6:35 pm
Private college tuition fee Increased => Private college attendance decreased-->but revenue increased
things to notice here is ..it does not mention that total tuition fee decreased

total tuition fee=number of student* tuition fee
the product can increase/remain constant even one of the factor is reduced

Increased revenue is possible in two ways
1. There is other sources of revenue than tuition fee
2. Amount of increase in tuition fee nullifies the effect of decrease in number of students

only tow options seems close contender..D and E

E says private college gets a larger percentage of its revenue from alumni than do public universities...this does not say that the revenue from alumni compensates the decrease(if any) in tuition fee..so we cannot conclude from this that revenue from alumni is the reason behind increased revenue---eliminated

only D is left
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by thephoenix » Tue May 11, 2010 8:47 pm
LET TUTION FEES PER STUDENT BE $10000 AND THE # OF STUDENTS BE 150 REVENUE=$150*10000=$1500000
D SAYS INC IN TF OFFSETS THE DEC IN # OF STUDENTS
I.E SUPPOSE NEW # OF STUDENTS ARE 100 CHANGE IN REVENUE IS $500000
NOW IF TUTION FEES WERE INCRESED TO $20000 THEN CHANGE IN RVENUE IS 20000*150-10000*150=$1500000 CHANGE IN REVENUE DUE TO INC IN TUTION FEE > CHANGE IN REVENUE DUE TO DEC IN # OF STUDENTS
AND THUS SUPPORTS THE ARGUMENT
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by akhpad » Tue May 11, 2010 11:31 pm
I understood this RC very well in the beginning but I confused to understand option D.
I also understood that choices A, B, C and E can't be the assumption.

Option D
Decrease in students attending private college has been more than offset by the increase in tuition.

I understood like this
Offset due to Decrease in students > offset due to tuition
Am I wrong because option D written in passive voice?

Can you correct my understanding? Please help on this English.

thephoenix - you explanation look good but why no. of students are same when tuition fee increased.
thephoenix wrote:LET TUTION FEES PER STUDENT BE $10000 AND THE # OF STUDENTS BE 150 REVENUE=$150*10000=$1500000
D SAYS INC IN TF OFFSETS THE DEC IN # OF STUDENTS
I.E SUPPOSE NEW # OF STUDENTS ARE 100 CHANGE IN REVENUE IS $500000
NOW IF TUTION FEES WERE INCRESED TO $20000 THEN CHANGE IN RVENUE IS 20000*150-10000*150=$1500000 CHANGE IN REVENUE DUE TO INC IN TUTION FEE > CHANGE IN REVENUE DUE TO DEC IN # OF STUDENTS
AND THUS SUPPORTS THE ARGUMENT
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by gtvisa2002 » Fri May 14, 2010 9:40 am
thephoenix explained it correctly but used the same no of students, thats the problem.

For simplicity lets reduce the numbers.....

Last year:
Fee: $10
No of students : 10
Rev = $100

This year:
Fee : $100
No of students : 3
Rev = $300

So before increasing the fee 10 folds, I was getting $100, after increasing I am getting $300, though I lost 70% of my students.
HTH. Thanks
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by this_time_i_will » Sun May 16, 2010 1:02 am
akhp77 wrote:I understood this RC very well in the beginning but I confused to understand option D.
I also understood that choices A, B, C and E can't be the assumption.

Option D
Decrease in students attending private college has been more than offset by the increase in tuition.

I understood like this
Offset due to Decrease in students > offset due to tuition
Am I wrong because option D written in passive voice?

Can you correct my understanding? Please help on this English.

thephoenix - you explanation look good but why no. of students are same when tuition fee increased.
I guess you did not understand D.D says that the loss in revenue because of lesser number of students has been compensated by increase in tution fees.
Lets say

total number of students before fees increase = 100.
tution fee per head = 10
total revenue = 1000

total number of students after fee increase = 50
tution fee per head = 30
total revenue = 1500

in your words:
revenue due to decrease in number of students << revenue due to increase in tution fee
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by Jen@VeritasPrep » Sun May 16, 2010 8:27 am
akhp77 wrote: Option D
Decrease in students attending private college has been more than offset by the increase in tuition.

I understood like this
Offset due to Decrease in students > offset due to tuition


Received a PM asking me to reply. If I'm reading correctly, you understood D to mean that the financial losses to private colleges due to the decrease in students were GREATER THAN the financial gains made from the increase in tuition.

As many of the posts are saying, this isn't quite right. The choice says that the decrease in students has been OFFSET by the increase in tuition, which means that the increase in tuition has had a greater financial impact on private colleges than the decrease in students has had. I like @this_time_i_will's wording that the tuition increase more than compensates for the decrease in students. In other words, the financial gains from higher tuition are outweighing the financial losses from decreased attendance, and this fact explains the steady increase in revenue for private colleges.

This is a classic example of a paradox question. We're given a surprising scenario (attendance is down, but revenue is up) and asked to explain how the scenario could be true in order to resolve the paradox. In this question, even though attendance is down, answer choice D tells us that the remaining students are paying more than enough in tuition to cover the losses and keep revenues rising.

Hope that helps!
Jen Rugani
GMAT Instructor, Veritas Prep
www.veritasprep.com
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by akhpad » Tue May 18, 2010 9:24 am
Thanks
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