himanshurajawat wrote:
Can anyone explain why option 'A' is correct?
Let's start with the conclusion of this argument:
Long-term gains from tickets bought under this new plan will be enormous because, unlike earlier discount tickets, these are not refundable.
Here's how the author's logic breaks down:
- Under the new plan, airlines offers tickets that, if purchased 2 days in advance, cost as much as 40% less than the heretofore lowest-priced tickets.
- These tickets are not refundable (unlike earlier discount tickets).
- Therefore, the airline's long-term gains from tickets bought under this new plan will be enormous.
OK, so we know that tickets bought under the new plan cost less than the lowest-priced tickets already available. Yet, the author concludes, the airline's long-term gains from these tickets will be enormous.
Whatever assumption the author is making should explain how long-term gains will be enormous,
despite the lower cost of these tickets. So we're looking for information that
explains how sales of advance tickets contribute to these expected long-term gains in revenue.
Remember, the missing information doesn't have to prove the conclusion. It just has to fill out the logic that the author is relying on to reach this conclusion in the first place.
Quote:
A. More discounted, advance purchase tickets are purchased than are actually used.
This is the only answer choice that provides a logical link between the purchase of advance tickets and gains in revenue:
- Under the new plan, airlines offers tickets that, if purchased 2 days in advance, cost as much as 40% less than the heretofore lowest-priced tickets.
- These tickets are not refundable (unlike earlier discount tickets).
- More discounted, advance purchase tickets are purchased than are actually used. So 2-day-advance ticket sales result in revenue gain, from advance ticket purchases that otherwise could have been refunded.
- Therefore, the airline's long-term gains from tickets bought under this new plan will be enormous.
Choice (A) identifies a potential source of revenue that we previously could not see:
advance ticket purchases that cannot be refunded when customers decide not to use the tickets. If we assume that a portion of tickets are consistently unused and consequently refunded, then eliminating refunds would logically result in more revenue.
This is enough for us to keep choice (A) as we evaluate everything else. And even if you're iffy on Choice (A), every other choice is simply not viable:
Quote:
B. Tickets requiring 30day advance purchase are not profitable for airlines.
So what? This information does absolutely nothing to explain how the new 2-day advanced purchase tickets could lead to long-term gains in revenue. Choice (B) only deepens the paradox without filling the logical gap we're asked to fill, so let's eliminate it.
Quote:
C. Few business travelers have taken (advantage) of 30day advance purchase tickets
It's tempting to
imagine that the number of 2-day-advance purchases will be incredibly massive, therefore leading to a kind of long-term growth that isn't currently supported by 30-day advance purchases.
The only problem is, Choice (C) doesn't give us that imaginary explanation. It doesn't even imply that explanation, because the only information we get from (C) is that few
business travelers buy
30-day advance tickets.
As with Choice (B), this answer choice doesn't tell us anything that would explain how the new 2-day advance purchase tickets could lead to long-term gains in revenue. And just like Choice (B), it should be eliminated.
Quote:
D. Airlines will have to discontinue offering 30-day advance purchase tickets when they begin offering 2-day advance purchase tickets.
This information has nothing to do with growth of long-term revenue. Eliminate it.
Quote:
E. The majority of the 2 day advance purchase tickets offered by a given airline will be sold to passengers who have not (previously) flown on that airline.
Like Choice (C), this answer choice uses language that
sounds like growth. And like Choice (C), this choice doesn't give us any
logical explanation for the long-term revenue growth that we care about.
Identifying who is purchasing the 2-day-advance tickets
does not explain how these purchases lead to enormous long-term gains in revenue.Eliminate (E), and the only good choice we're left with is (A).
I hope this helps!
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