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The supply of iron ore, the most important component in

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The supply of iron ore, the most important component in [#permalink] New post 02 Apr 2013, 09:42
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A
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C
D
E

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Question Stats:

74% (02:31) correct 26% (01:42) wrong based on 127 sessions
The supply of iron ore, the most important component in steelmaking, has been steadily declining
in Marco city. This has forced steel manufacturing units in Marco city to source iron ore from far
off mines leading to an increase in their transportation costs. Because transportation costs make
up a large chunk of the total cost of steelmaking, the steel manufacturers in Marco city have had
no option but to increase the selling price of their steel. This has in turn led to an increase in the
retail price of utensils and other articles of daily use made of steel. Since the retail consumers now
have to pay more for these steel items, while their earnings remain unchanged, they have decided
to cut down on their non essential expenditure such as that on movie tickets. This has led movie
theatres in Marco city to reduce their ticket prices.

Which of the following provides the most support for the assertion that the prices of movie tickets
in Marco city will continue to decline in future?

(A) The people of Marco city will not be willing to cut down their expenditure on eating out

(B) After the inauguration of the Goldport Bridge, expected to happen very soon, the transportation costs to Marco city will be halved

(C) There are no blockbuster movies with stellar star casts lined up for release anytime soon

(D) The supply of iron ore to Marco city is expected to go down even more in the near future

(E) Residents of Marco city view movie tickets as non essential items of expenditure
[Reveal] Spoiler: OA

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Re: The supply of iron ore, the most important component in stee [#permalink] New post 02 Apr 2013, 17:18
Supply of iron ore decreases-->transportation cost increases-->retail of steel items increases-->since earning remains unchanged, consumers purchase of movie tickets decreases-->ticket prices decreases.
(A) The people of Marco city will not be willing to cut down their expenditure on eating out doesn't explain why ticket prices will continue to decrease in the future

(B) After the inauguration of the Goldport Bridge, expected to happen very soon, the transportation costs to Marco city will be halved if transportation cost decreases, the ticket prices might increase.

(C) There are no blockbuster movies with stellar star casts lined up for release anytime soon out of scope

(D) The supply of iron ore to Marco city is expected to go down even more in the near future yes. the reason why movie tickets decrease in the first place was because of the decrease in iron ore supply.

(E) Residents of Marco city view movie tickets as non essential items of expenditure stated but does not answer the question
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Re: The supply of iron ore, the most important component in stee [#permalink] New post 02 Apr 2013, 19:00
has to be D :The supply of iron ore to Marco city is expected to go down even more in the near future
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Re: The supply of iron ore, the most important component in stee [#permalink] New post 03 Apr 2013, 07:35
The stem links the MT price reduction to the Iron price~supply.

We are asked then to justify the extension of this phenomenon in the future.

Only D can clearly justify that.
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Re: The supply of iron ore, the most important component in stee [#permalink] New post 03 Apr 2013, 08:36
Yes D is clearly the strengthener.

I opted D. Pl provide OA.
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Re: The supply of iron ore, the most important component in stee [#permalink] New post 03 Apr 2013, 12:19
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Re: The supply of iron ore, the most important component in [#permalink] New post 22 Dec 2013, 11:27
carcass wrote:
The supply of iron ore, the most important component in steelmaking, has been steadily declining
in Marco city. This has forced steel manufacturing units in Marco city to source iron ore from far
off mines leading to an increase in their transportation costs. Because transportation costs make
up a large chunk of the total cost of steelmaking, the steel manufacturers in Marco city have had
no option but to increase the selling price of their steel. This has in turn led to an increase in the
retail price of utensils and other articles of daily use made of steel. Since the retail consumers now
have to pay more for these steel items, while their earnings remain unchanged, they have decided
to cut down on their non essential expenditure such as that on movie tickets. This has led movie
theatres in Marco city to reduce their ticket prices.

Which of the following provides the most support for the assertion that the prices of movie tickets
in Marco city will continue to decline in future?

(A) The people of Marco city will not be willing to cut down their expenditure on eating out

(B) After the inauguration of the Goldport Bridge, expected to happen very soon, the transportation costs to Marco city will be halved

(C) There are no blockbuster movies with stellar star casts lined up for release anytime soon

(D) The supply of iron ore to Marco city is expected to go down even more in the near future

(E) Residents of Marco city view movie tickets as non essential items of expenditure



Please explain,
Why not A, if people opt to cut down on their expenditure on eating out, then the ticket sale would remain same, even if the steel prices go down further.
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Re: The supply of iron ore, the most important component in [#permalink] New post 22 Dec 2013, 13:59
Hi Seabhi,

Let me see if I can help.

In my opinion you've got to be careful with nagation type reasoning. Just because you can flip something around doesn't mean you should.

The question is looking for a reason WHY something might happen, i.e. something to support it.

A gives no reason WHY, it gives us a random piece of information. It gives no reason why something will change in the future.

Look at C, it clearly does this. The whole article is about the link between cinema and ore prices.

james
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Re: The supply of iron ore, the most important component in [#permalink] New post 24 Dec 2013, 08:08
I somehow don't feel convinced with the OA of this question.
D) does give us a reason to believe that ticket prices would continue to decline but C) does that to a greater degree. Let us examine answer choices C) and D) only.
C) says that there are no blockbuster movies with stellar star casts lined up for release anytime soon. So in the near future most people might not want to spend their money on movies that are not extraordinary. If this happens the movie theaters will have to further decrease the ticket prices to attract audience.
D) says that the supply of iron ore to Marco city is expected to go down even more in the near future. Obviously then the retail prices of essential objects made of steel would increase. Hence most people would try to decrease their expenses on non-essential items. Now there might be so many other non-essential items. Probability of decrease of ticket prices is there as well. But what if the decrease of expenditure on other non-essential items are more than that of movie tickets. What if the expenditure on movie tickets undergoes significantly less or almost negligible decline? This option does work a bit but I feel that option C) works better.
Hence I will pick C)
Please comment.
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Re: The supply of iron ore, the most important component in   [#permalink] 24 Dec 2013, 08:08
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