ecause postage rates are rising, Home Decorator magazine

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ecause postage rates are rising, Home Decorator magazine [#permalink]

08 Jun 2011, 19:47

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Question Stats:

58% (01:27) correct

41% (01:37) wrong

based on 12 sessions

ecause postage rates are rising, Home Decorator magazine plans to maximize its profits by reducing by one half the number of issues it publishes each year.
The quality of articles, the number of articles published per year, and the subscription price will not change. Market research shows that neither subscribers nor advertisers will be lost if the magazine's plan is instituted.

Which of the following, if true, provides the strongest evidence that the magazine's profits are likely to decline
if the plan is instituted?
(A) With the new postage rates, a typical issue under the proposed plan would cost about one-third more to
mail than a typical current issue would.
(B) The majority of the magazine's subscribers are less concerned about a possible reduction in the quantity
of the magazine's articles than about a possible loss of the current high quality of its articles.
(C) Many of the magazine's long-time subscribers would continue their subscriptions even if the subscription
price were increased.
(D) Most of the advertisers that purchase advertising space in the magazine will continue to spend the same
amount on advertising per issue as they have in the past.
(E) Production costs for the magazine are expected to remain stable.

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Re: Matter of selecting whats the main point [#permalink]

12 Jun 2011, 19:18

Clear D.

If new no of issues = Half the number of old issues and the money spent by advertizers is anything less than twice as before, there will be loss of advertisizing revenue. Hence D

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Re: Matter of selecting whats the main point [#permalink]

12 Jun 2011, 20:22

since advertising dollars are per issue in D, the right answer is D

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Re: Matter of selecting whats the main point [#permalink]

13 Jun 2011, 02:28

D shows that advertising revenues will decrease.
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Re: Matter of selecting whats the main point [#permalink] 13 Jun 2011, 02:28

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ecause postage rates are rising, Home Decorator magazine

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