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As a result of recent mergers, three airlines now carry over

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As a result of recent mergers, three airlines now carry over  [#permalink]

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New post 18 Jun 2012, 07:02
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A
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  35% (medium)

Question Stats:

71% (01:58) correct 29% (02:10) wrong based on 267 sessions

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As a result of recent mergers, three airlines now carry over ninety percent of one country's domestic traffic. Because prices are almost always higher in a market place where a few companies can chose to reduce greatly the total supply of goods or services than in a marketplace with many competitors, air ticket prices soon will rise.

Which of the following statement, if true, would most seriously weaken the conclusion drawn above?

A) Many airlines confirm more reservations, when possible, than there are seats available for any given flight.

B) Inflation in energy prices will cut into the profits of all major airlines if air ticket prices do not rise soon.

c) The number of flights departing from certain airports has been reduced in order to alleviate overcrowding.

D) Further mergers could occur among the smaller airlines that still control almost ten percent of domestic traffic.

E) All the major airlines have gone into debt to buy large fleets of new airplanes, which they must fly as often and as nearly fully loaded as possible in order to avoid bankruptcy.
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Re: The merger of airline  [#permalink]

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New post 18 Jun 2012, 09:47
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The argument evaluation:
3 airlines companies carry >90% of domestic traffic
Air ticket prices soon will rise because the prices are higher in market places where a few companies can chose to reduce greatly the total supply of goods or services than in a market places with many competitors.

Which of the following statement, if true, would most seriously weaken the conclusion drawn above?

A) Many airlines confirm more reservations, when possible, than there are seats available for any given flight. => the reservation is irrelevant to the change in prices.

B) Inflation in energy prices will cut into the profits of all major airlines if air ticket prices do not rise soon.=> out of scope

c) The number of flights departing from certain airports has been reduced in order to alleviate overcrowding. => out of scope

D) Further mergers could occur among the smaller airlines that still control almost ten percent of domestic traffic. => the price of the flight will increase, not reduce.

E) All the major airlines have gone into debt to buy large fleets of new airplanes, which they must fly as often and as nearly fully loaded as possible in order to avoid bankruptcy.ANSWER
=>Saving the space in term of loading as full as possible to avoid bankruptcy will reduce the price of
flight.
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Re: As a result of recent mergers, three airlines  [#permalink]

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New post 21 Jun 2012, 16:46
E.

Because the airlines cannot choose to make fewer flights (reduce supply) since they have to pay for the new planes by making as many flights as possible.

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Re: As a result of recent mergers, three airlines  [#permalink]

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New post 22 Jun 2012, 12:24
Why C can't be correct here.. It gives other reason (inflation) for hike in price so it is also weakening the argument. Somebody please explain.
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Re: As a result of recent mergers, three airlines  [#permalink]

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New post 22 Jun 2012, 12:53
@dexerash:

the reason is already stated in the argument. [highlight]"a few companies can chose to reduce greatly the total supply of goods or services"[/highlight]. there by increasing the price.

So its actually strengthening.
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Re: As a result of recent mergers, three airlines  [#permalink]

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New post 08 Aug 2012, 01:58
prakash111687 wrote:
@dexerash:

the reason is already stated in the argument. "a few companies can chose to reduce greatly the total supply of goods or services". there by increasing the price.

So its actually strengthening.


As far as I understand this question, the argument says monopoly (prices are almost ...... in a marketplace) will cause a rise in price. So if we introduce another factor that can produce the same effect, the argument will be weakened.

So, A (monopoly) --> B (price hike)
But, C (inflation in energy) --> B (price hike).

Hence option B should be correct. Could someone please help in clarifying...

Thanks.
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Re: As a result of recent mergers, three airlines now carry over  [#permalink]

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New post 07 Jan 2015, 11:17
Please explain
I find C more correct ,because after merger no company will run all its flight until they are making profit. And all flight owners will like to make profit so why only carriers those are on the verge of bankruptcy will ensure their flight is running full.
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Re: As a result of recent mergers, three airlines now carry over  [#permalink]

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New post 11 Jan 2015, 17:53
Please let us know why OA is E ? E looks to be wordy and convoluted.Does not say anything substantial. Option B attacks the conclusion more directly by giving a different view and it do fall in scope of discussion as it talks about price.
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Re: As a result of recent mergers, three airlines now carry over  [#permalink]

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New post 11 Jan 2015, 23:45
jhasac wrote:
Please let us know why OA is E ? E looks to be wordy and convoluted.Does not say anything substantial. Option B attacks the conclusion more directly by giving a different view and it do fall in scope of discussion as it talks about price.


Energy is beyond the scope of the argument.

Always consider information given in the argument to base your analysis.
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As a result of recent mergers, three airlines now carry over  [#permalink]

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New post 19 Sep 2016, 07:17
jhasac wrote:
Please let us know why OA is E ? E looks to be wordy and convoluted.Does not say anything substantial. Option B attacks the conclusion more directly by giving a different view and it do fall in scope of discussion as it talks about price.



" Because prices are almost always higher in a market place where a [color=#00ff00]few companies can chose to reduce greatly the total supply [[/color]/b]of goods or services than in a marketplace with many competitors,air ticket prices soon will rise."


E) All the major airlines have gone into debt to buy large fleets of new airplanes, which they [b]must fly as often and as nearly fully loaded as possible
in order to avoid bankruptcy.


Authors argument is airlines will reduce number of flights to increase the prices. As per option E, airline have to operate in full capacity and more frequently.
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Re: As a result of recent mergers, three airlines now carry over  [#permalink]

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New post 15 Feb 2019, 07:49
ItsAWar wrote:
prakash111687 wrote:
@dexerash:

the reason is already stated in the argument. "a few companies can chose to reduce greatly the total supply of goods or services". there by increasing the price.

So its actually strengthening.


As far as I understand this question, the argument says monopoly (prices are almost ...... in a marketplace) will cause a rise in price. So if we introduce another factor that can produce the same effect, the argument will be weakened.

So, A (monopoly) --> B (price hike)
But, C (inflation in energy) --> B (price hike).

Hence option B should be correct. Could someone please help in clarifying...



Thanks.


If you read option B carefully till the end , it shows that airlines need to increase prices in order to cope with the increased energy costs due to inflation ; Hence , it is somewhat strengthening the conclusion.

Hope it helps .

Thanks

Vikas
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Re: As a result of recent mergers, three airlines now carry over   [#permalink] 15 Feb 2019, 07:49
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