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In order to finance road repairs, the highway commission of [#permalink]
26 Sep 2010, 11:59

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Question Stats:

42% (02:33) correct
58% (01:45) wrong based on 303 sessions

In order to finance road repairs, the highway commission of a certain state is considering a 50 percent increase in the 10-centers-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by at least 50 percent per year.

Which of the following is an assumption on which the highway commissioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level. (B) The total number of trips made on the toll highway per year will not decrease from its current level. (C) The average length of a trip made on the toll highway will not decrease from its current level. (D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level. (E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level.

Okay, so the commissioner is claiming that an increase in tolls will result in a proportionate increase in revenues. So the assumption must have something to do with the increase in tolls not somehow increasing costs or decreasing the amount of money that comes in (through a decrease in traffic, for example). For a 50% increase in tolls to result in a 50% increase in revenues, the amount of traffic would have to stay similar. But every single one of the answers makes this assumption!

A - If the amount of money for road repairs increased, more money would be spent, which would cut into that 50% figure. B - If the total number of trips made on the highway decreased, due to the increase in tolls, then the highway would generate less money than expected. (Revenues would likely still go up, but how could they hit the 50% increase?) C - If the average length of the trips made on the highway went down, then the tolls would generate less money, because they're paid by the mile. D - If the toll increase causes more people to avoid using the highway, then revenues won't increase as much as hoped. I picked this answer. E - If the total distance traveled by the vehicles went down, revenues won't increase as much as hoped. This is the OA.

The official explanation is:

"The toll is charged on a per-mile basis. A 50 percent increase in the toll will bring a 50 percent increase in revenue only if the total number of miles traveled on the toll highway per year does not decrease."

But all of the answers, except A, would result in a decrease in the total number of miles traveled on the highway.

Okay, so the passage break down tells us that he plans to increase tolls by 50% and this will lead to 50% increase in revenue. This means that the distance traveled by people which is toll-worthy has remained unchanged.

TehJay wrote:

In order to finance road repairs, the highway commission of a certain state is considering a 50 percent increase in the 10-centers-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by at least 50 percent per year.

Which of the following is an assumption on which the highway commissioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level. The revenue generated is different from profit margins. Revenue can be considered to be the amount they make through this road toll. Irrelevant answer, though it sounds perfect to be a shell game type thing too. (B) The total number of trips made on the toll highway per year will not decrease from its current level. We don't care about the number of the trips. People might make more trips and travel shorter per trip, still keeping the total distance traveled on these toll roads the same. So incorrect. (C) The average length of a trip made on the toll highway will not decrease from its current level. We don't care about average length either. What if the average length per trip remained the same and you had a 50% reduction in the NUMBER of trips? Then the total distance will go down. So incorrect. (D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level. This doesn't add to the revenue. Out of scope. (E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level. This is the right answer.

The stimulus says he highway commission of a certain state is considering a 50 percent increase in the 10-centers-per-mile toll for vehicles using its toll highway.

Conclusion is the toll increase will increase the annual revenue generated by the toll highway by at least 50 percent per year.

so the percentage of increase in toll = percentage of increase in revenue i.e total distance traveled on the bridge is constant. its the total distance because the toll is calculated on per mile basis. not the number of trips or average length of the trips or the number of travelers on the bridge

Okay, so the passage break down tells us that he plans to increase tolls by 50% and this will lead to 50% increase in revenue. This means that the distance traveled by people which is toll-worthy has remained unchanged.

TehJay wrote:

In order to finance road repairs, the highway commission of a certain state is considering a 50 percent increase in the 10-centers-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by at least 50 percent per year.

Which of the following is an assumption on which the highway commissioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level. The revenue generated is different from profit margins. Revenue can be considered to be the amount they make through this road toll. Irrelevant answer, though it sounds perfect to be a shell game type thing too. (B) The total number of trips made on the toll highway per year will not decrease from its current level. We don't care about the number of the trips. People might make more trips and travel shorter per trip, still keeping the total distance traveled on these toll roads the same. So incorrect. (C) The average length of a trip made on the toll highway will not decrease from its current level. We don't care about average length either. What if the average length per trip remained the same and you had a 50% reduction in the NUMBER of trips? Then the total distance will go down. So incorrect. (D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level. This doesn't add to the revenue. Out of scope. (E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level. This is the right answer.

In (C) you said, "What if the number of trips goes down? Then the total distance will go down." Then in (D) you said that the number of trips is "out of scope." You contradicted yourself and helped explain why (D) is also correct.

Honestly, I guess I understand why (E) is the OA - because it's the only one that specifically mentions the total distance traveled - but B and D will also directly lead to a decrease in the total number of miles traveled. It seems really ambiguous to me.

This was a good question. I got confused between B & E.. And its obvious to get confused here either of the ways revenue will decrease. But as the answer states, the key here is 50% increase.. _________________

This is not a DS question. In option C, by telling us about the average length of trip and not about the number of trips and in D, by telling us about the number of trips and not about the average length, we are left with incomplete information. I don't see any contradiction.

TehJay wrote:

whiplash2411 wrote:

Okay, so the passage break down tells us that he plans to increase tolls by 50% and this will lead to 50% increase in revenue. This means that the distance traveled by people which is toll-worthy has remained unchanged.

TehJay wrote:

In order to finance road repairs, the highway commission of a certain state is considering a 50 percent increase in the 10-centers-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by at least 50 percent per year.

Which of the following is an assumption on which the highway commissioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level. The revenue generated is different from profit margins. Revenue can be considered to be the amount they make through this road toll. Irrelevant answer, though it sounds perfect to be a shell game type thing too. (B) The total number of trips made on the toll highway per year will not decrease from its current level. We don't care about the number of the trips. People might make more trips and travel shorter per trip, still keeping the total distance traveled on these toll roads the same. So incorrect. (C) The average length of a trip made on the toll highway will not decrease from its current level. We don't care about average length either. What if the average length per trip remained the same and you had a 50% reduction in the NUMBER of trips? Then the total distance will go down. So incorrect. (D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level. This doesn't add to the revenue. Out of scope. (E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level. This is the right answer.

In (C) you said, "What if the number of trips goes down? Then the total distance will go down." Then in (D) you said that the number of trips is "out of scope." You contradicted yourself and helped explain why (D) is also correct.

Honestly, I guess I understand why (E) is the OA - because it's the only one that specifically mentions the total distance traveled - but B and D will also directly lead to a decrease in the total number of miles traveled. It seems really ambiguous to me.

Re: Toll increase - all answers seem correct! [#permalink]
24 Dec 2010, 15:58

Profit = revenue - cost. So, in order for profit to increase, revenue will need to increase and, cost must decrease OR remain unchanged. E, states that, the total distance traveled by the trucks should not decrease/unchanged....if it decreases then, the trucks may take a shorter route and not end-up paying toll. Therefore, the commissioner assumes that "total distance" will not change causing any effect on the profit.

Re: Toll increase - all answers seem correct! [#permalink]
26 Dec 2010, 23:58

Friends we overlooke dthe purpose behind why this questions has been posted in the First Place. The Guy who posted this question is confused because he finds all the options correct except A and i agree with Him. I feel all the options except A make it appear that the Revenue will decrease if any of the options B to E are implemented. Guys please correct me if we are wrong . I suppose Teh Jay agrees on this view _________________

Re: Toll increase - all answers seem correct! [#permalink]
27 Dec 2010, 00:12

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Expert's post

mundasingh123 wrote:

Friends we overlooke dthe purpose behind why this questions has been posted in the First Place. The Guy who posted this question is confused because he finds all the options correct except A and i agree with Him. I feel all the options except A make it appear that the Revenue will decrease if any of the options B to E are implemented. Guys please correct me if we are wrong . I suppose Teh Jay agrees on this view

The question is fairly straightforward. A 50% increase in the per-mile toll is brought about. In order to increase the annual revenue, the mandated condition is: Number of miles remain same, or increases.

In order to finance road repairs, the highway commission of a certain state is considering a 50 percent increase in the 10-centers-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by at least 50 percent per year.

Which of the following is an assumption on which the highway commissioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level. - Irrelevant. Why do we care about the road repairs? We are talking about revenue generated by tolls, not the "profit" or "breakeven" of the highway authorities. (B) The total number of trips made on the toll highway per year will not decrease from its current level. - Information about number of trips without average mileage per trip is redundant. (C) The average length of a trip made on the toll highway will not decrease from its current level. As stated above, information about mileage without the number of trips will not serve any purpose for what we are asked to find here. (D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level. This is a very indirect option, and we can probably hold on to see if there's a better answer. (E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level. This is the correct answer. If you are looking a toll that is charged per mile, and you know the total distance traveled by the cars stays the same, in essence you're saying that there's a 50% increase in the revenues. Think about numerical figures:

Let's say total distance traveled before was 100 miles. This stays the same now. Let's assume the toll per mile was $1 initially and now it's $1.5. Original revenue was $100 and now revenue is $150, which is 50% more than the original revenue. This statement directly supplements the question and hence is the right choice.

TehJay's Question was:

Quote:

Honestly, I guess I understand why (E) is the OA - because it's the only one that specifically mentions the total distance traveled - but B and D will also directly lead to a decrease in the total number of miles traveled. It seems really ambiguous to me.

B and D give you one part of the information and fail to give you the rest. Knowledge about the number of trips without average distance traveled per trip or vice versa is not useful in evaluating this argument. Okay, as per B the number of trips has increased from say, 50 to 100. But the average length of the trip has gone down from 3 miles to 1 mile, this means, in effect, the toll collected has reduced. Similarly for the other situation. Let's say the average miles per trip has gone up, but it's in a way that the number of trips have gone down. So each piece by itself is insufficient to frame a conclusion. You can't afford to assume whatever you need to justify an answer or in this case, answers that seems right. Thinking objectively about all possible constraints will help resolve most issues on tricky questions like these. And in the end, sometimes, you just have to go with the best option, since it might feel like multiple options are correct sometimes.

Re: Toll increase - all answers seem correct! [#permalink]
27 Dec 2010, 00:15

whiplash2411 wrote:

mundasingh123 wrote:

Friends we overlooke dthe purpose behind why this questions has been posted in the First Place. The Guy who posted this question is confused because he finds all the options correct except A and i agree with Him. I feel all the options except A make it appear that the Revenue will decrease if any of the options B to E are implemented. Guys please correct me if we are wrong . I suppose Teh Jay agrees on this view

The question is fairly straightforward. A 50% increase in the per-mile toll is brought about. In order to increase the annual revenue, the mandated condition is: Number of miles remain same, or increases.

In order to finance road repairs, the highway commission of a certain state is considering a 50 percent increase in the 10-centers-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by at least 50 percent per year.

Which of the following is an assumption on which the highway commissioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level. - Irrelevant. Why do we care about the road repairs? We are talking about revenue generated by tolls, not the "profit" or "breakeven" of the highway authorities. (B) The total number of trips made on the toll highway per year will not decrease from its current level. - Information about number of trips without average mileage per trip is redundant. (C) The average length of a trip made on the toll highway will not decrease from its current level. As stated above, information about mileage without the number of trips will not serve any purpose for what we are asked to find here. (D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level. This is a very indirect option, and we can probably hold on to see if there's a better answer. (E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level. This is the correct answer. If you are looking a toll that is charged per mile, and you know the total distance traveled by the cars stays the same, in essence you're saying that there's a 50% increase in the revenues. Think about numerical figures:

Let's say total distance traveled before was 100 miles. This stays the same now. Let's assume the toll per mile was $1 initially and now it's $1.5. Original revenue was $100 and now revenue is $150, which is 50% more than the original revenue. This statement directly supplements the question and hence is the right choice.

TehJay's Question was:

Quote:

Honestly, I guess I understand why (E) is the OA - because it's the only one that specifically mentions the total distance traveled - but B and D will also directly lead to a decrease in the total number of miles traveled. It seems really ambiguous to me.

B and D give you one part of the information and fail to give you the rest. Knowledge about the number of trips without average distance traveled per trip or vice versa is not useful in evaluating this argument. Okay, as per B the number of trips has increased from say, 50 to 100. But the average length of the trip has gone down from 3 miles to 1 mile, this means, in effect, the toll collected has reduced. Similarly for the other situation. Let's say the average miles per trip has gone up, but it's in a way that the number of trips have gone down. So each piece by itself is insufficient to frame a conclusion. You can't afford to assume whatever you need to justify an answer or in this case, answers that seems right. Thinking objectively about all possible constraints will help resolve most issues on tricky questions like these. And in the end, sometimes, you just have to go with the best option, since it might feel like multiple options are correct sometimes.

'Thinking objectively about all possible constraints will help resolve most issues on tricky questions like these.' thanks whiplash that is a very good practice .all possible constraints have to be considered. this was definitely a tricky question, _________________

What is of supreme importance in war is to attack the enemy's strategy.

Re: In order to finance road repairs, the highway commission of [#permalink]
29 Jan 2015, 00:43

Lol I couldn't understand what "centers per mile toll" meant until i read the answers.

When i first read that, i couldn't make any sense of the line that there will be a 50% increase in 10 centers-per-mile roll. I was picturing 10 toll centers every mile lol.

gmatclubot

Re: In order to finance road repairs, the highway commission of
[#permalink]
29 Jan 2015, 00:43

Originally posted on MIT Sloan School of Management : We are busy putting the final touches on our application. We plan to have it go live by July 15...