Find all School-related info fast with the new School-Specific MBA Forum

It is currently 20 Oct 2014, 02:12

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Local phone companies have monopolies on phone service

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
GMAT Club Legend
GMAT Club Legend
User avatar
Joined: 07 Jul 2004
Posts: 5095
Location: Singapore
Followers: 19

Kudos [?]: 153 [0], given: 0

Local phone companies have monopolies on phone service [#permalink] New post 15 Oct 2005, 12:16
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
Local phone companies have monopolies on phone service within their areas. Cable television can be transmitted via the wires that are already in place and owned by the phone companies. Cable television companies argue that if the telephone companies were to offer cable service, these telephone companies would have an unfair advantage, because their cable transmissions could be subsidized by the profits of their monopolies on phone service.

Which of the following, if true, would ease the cable companies’ fear of unfair competition?
(A) In order to use existing telephone wire, telephone companies would need to modernize their operations, a process so expensive it would virtually wipe out all profit from their monopoly for the foreseeable future.
(B) If a phone company were to offer cable service within a particular area, it would have a monopoly within that area.
(C) The cost of television service, whether provided by cable or telephone companies, scales; that is, the total cost of transmission rises only marginally as more homes are added to the network.
(D) Cable programming that offers more channels is already available through satellite dish, but the initial cost of the dish is extremely high.
(E) Cable television will never be able to compete with the burgeoning video rental industry, especially as more homes now have video cassette recorders than ever did before.

On the basis of the information provided in the passage above, which of the following questions can be answered?
(A) Are phone companies as efficient as cable companies in providing reliable and inexpensive service?
(B) If phone companies were allowed to provide cable service, would they want to do so?
(C) Do the cable companies believe that the local phone companies make a profit on phone service?
(D) Are local phone companies forbidden to offer cable service?
(E) Is it expected that phone companies will have a monopoly on cable service?
Director
Director
avatar
Joined: 21 Aug 2005
Posts: 795
Followers: 2

Kudos [?]: 7 [0], given: 0

 [#permalink] New post 15 Oct 2005, 15:17
1) A

If it is so expensive for the phone companies, they won't be able to subsidize transmission by their profits (as the profit will be wiped out upon modernization)

2) C

Cable companies say "cable transmissions could be subsidized by the profits of their monopolies on phone service"
  [#permalink] 15 Oct 2005, 15:17
    Similar topics Author Replies Last post
Similar
Topics:
2 Experts publish their posts in the topic Local phone companies have monopolies on phone service manalq8 6 18 Jan 2012, 09:33
Local phone companies have monopolies on phone service TomB 3 07 Apr 2011, 23:35
Local phone companies have monopolies on phone service prasun84 6 18 Nov 2008, 01:16
Experts publish their posts in the topic Local phone companies have monopolies on phone service marcodonzelli 2 08 Feb 2008, 05:20
Local phone companies have monopolies on phone service remgeo 7 24 Mar 2006, 07:56
Display posts from previous: Sort by

Local phone companies have monopolies on phone service

  Question banks Downloads My Bookmarks Reviews Important topics  


cron

GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.