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# A recent spate of launching and operating mishaps with television sate

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Manager
Joined: 13 Apr 2017
Posts: 63
Re: A recent spate of launching and operating mishaps with television sate [#permalink]

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01 May 2017, 18:11
after taking some moments to think over the question; I find one way to interpret the answer/

The question gives 2 scenarios that contradict with each other.
Scenario 1: when satellite fails -> claims increase -> insurance premium higher -> more pressure on performance so that no more failure
Scenario 2 (question): cost will continue to be higher-> prediction: it keeps failing
explanation: C tells why higher cost cannot guarantee a success
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Joined: 13 Feb 2015
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Re: A recent spate of launching and operating mishaps with television sate [#permalink]

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26 Jul 2017, 09:44
Merged topics. Please, search before posting questions!
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Manager
Status: Final Call! Will Achieve Target ANyHow This Tym! :)
Joined: 05 Jan 2016
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Location: India
GMAT 1: 620 Q49 V25
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Re: A recent spate of launching and operating mishaps with television sate [#permalink]

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06 Aug 2017, 10:20
The satellites are caught in a vicious cycle: mishaps led to more claims, more claims led to higher premiums, higher premiums made satellite use more expensive, higher expenses led to higher demands on satellite performance. Choice C closes the "circle" of issues here because, if satellites are going to fail more due to high performance demands, then there will be more claims, and the whole thing will start all over again.
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Manager
Status: Final Call! Will Achieve Target ANyHow This Tym! :)
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Location: India
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Re: A recent spate of launching and operating mishaps with television sate [#permalink]

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06 Aug 2017, 10:45
Can someone explain options A, D and E in more detail.

Following is my understanding for these 3 options respectively,

A. Since the risk to insurers of satellites is spread over relatively few units, insurance premiums are necessarily very high.
As the insurance premiums are very high, satellites would be more expensive to launch and operate. But it does not support or provide any evidence to support the conclusion that the cost of satellites would continue to increase.

D. Most satellites are produced in such small numbers that no economies of scale can be realized.
First of all, meaning of economies of scale (As I was not aware of this meaning earlier),
Economies of scale are the reduction in the per unit cost of production as the volume of production increases. In other words, the cost per unit of production decreases as volume of product increases.
So, this option basically means that as satellites are produced in such small numbers that is the overall volume of production is so less that the cost per unit of production is still high. That is the satellites are still expensive. But this option does not cater to the conclusion that why the cost of satellites will continue to increase. Thus, this option statement is incorrect.

E. Since many satellites are built by unwieldy international consortia, inefficiencies are inevitable.
As per this option statement, inefficiencies are inevitable means the mishaps will still occur and claims will increase with higher insurance premiums thus more expensive satellites. But this option also fails to explain why the cost of satellites will continue to increase.
What do we actually mean in option E, when we mention unwieldy international consortia and does 'inefficiencies are inevitable' CORRELATES to 'mishaps will not stop happening'?

mikemcgarry chiranjeev
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Regards,
Varun

Trying my best..... will succeed definitely! :)

The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long.
+1 Kudos if you find this post helpful. :)

Do Check OG 2017 SC Solutions - http://gmatwithcj.com/solutions-gmat-official-guide-2017-sentence-correction-questions/

Last edited by vnigam21 on 09 Aug 2017, 22:59, edited 1 time in total.
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Joined: 30 Jun 2017
Posts: 6
Re: A recent spate of launching and operating mishaps with television sate [#permalink]

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09 Aug 2017, 22:55
Only option C talks about why the prices could be increased.
Re: A recent spate of launching and operating mishaps with television sate   [#permalink] 09 Aug 2017, 22:55

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