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# Because of greater competition in the telephone industry, long-dis...

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Director
Joined: 12 Feb 2015
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Because of greater competition in the telephone industry, long-dis...  [#permalink]

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20 Feb 2019, 09:42
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15% (low)

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98% (01:17) correct 2% (01:37) wrong based on 42 sessions

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Because of greater competition in the telephone industry, long-distance phone calls are now 25 percent cheaper than they were just a few years ago. Yet surprisingly, the average household's bill for long-distance services increased by one-third over the same time period.

Which of the following, if true, would most directly explain the higher long-distance bill paid by the average household?

A) Although long-distance calls made by individual callers are now less expensive, the cost of long-distance calls made by businesses and institutions has gone up.
B) Rates for calls made during the evening, the time when most consumers make long-distance calls, have gone down.
C) Profits earned by telephone companies continue to increase despite the decline in rates charged for long-distance service.
D) The use of electronic mail, which is far less costly than long-distance telephone service, has increased by 800% over the past several years.
E) Cheaper long-distance rates have encouraged households to call more frequently and talk for longer periods of time than they did when the service was more expensive.

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Because of greater competition in the telephone industry, long-dis...  [#permalink]

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20 Feb 2019, 10:34
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CAMANISHPARMAR wrote:
Because of greater competition in the telephone industry, long-distance phone calls are now 25 percent cheaper than they were just a few years ago. Yet surprisingly, the average household's bill for long-distance services increased by one-third over the same time period.

Which of the following, if true, would most directly explain the higher long-distance bill paid by the average household?

I think E is the clear winner. C and D are irrelevant.

In A we don't know how much calls businesses and institutions have made and how much the cost of calls has gone up. Nothing is clear.

As per information given in B, average cost should have been gone down. But our premise says otherwise.

E is the only valid answer. Though call rates have gone down for LDCs , the duration has increased.

A) Although long-distance calls made by individual callers are now less expensive, the cost of long-distance calls made by businesses and institutions has gone up.

B) Rates for calls made during the evening, the time when most consumers make long-distance calls, have gone down.

C) Profits earned by telephone companies continue to increase despite the decline in rates charged for long-distance service.

D) The use of electronic mail, which is far less costly than long-distance telephone service, has increased by 800% over the past several years.

E) Cheaper long-distance rates have encouraged households to call more frequently and talk for longer periods of time than they did when the service was more expensive.
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Re: Because of greater competition in the telephone industry, long-dis...  [#permalink]

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20 Feb 2019, 11:56
A - Incorrect as the statement does not concern itself with businesses and other institutions.
B - Incorrect as this statement explains why rates have reduced not our case where they have increased.
C - Incorrect as it is irrelevant to the question.
D - Incorrect , Same reason as B
E - Correct. even though rates have reduced, increased consumption can explain why the overall bill has increased.

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Re: Because of greater competition in the telephone industry, long-dis...   [#permalink] 20 Feb 2019, 11:56
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