GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 21 Aug 2018, 05:26

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Because postage rates are rising, Home Decorator magazine

Author Message
TAGS:

### Hide Tags

VP
Joined: 14 May 2006
Posts: 1369
Because postage rates are rising, Home Decorator magazine  [#permalink]

### Show Tags

13 Aug 2006, 17:32
12
53
00:00

Difficulty:

55% (hard)

Question Stats:

65% (01:33) correct 35% (01:46) wrong based on 2751 sessions

### HideShow timer Statistics

Official Guide for GMAT Verbal Review, 2nd Edition

Practice Question
Question No.: 71
Page: 145
Difficulty:

Because postage rates are rising, Home Decorator magazine plans to maximize its profits by reducing by one half the number of issues it publishes each year. The quality of articles, the number of articles published per year, and the subscription price will not change. Market research shows that neither subscribers nor advertisers will be lost if the magazine's plan is instituted.

Which of the following, if true, provides the strongest evidence that the magazine's profits are likely to decline if the plan is instituted?

(A) With the new postage rates, a typical issue under the proposed plan would cost about one-third more to mail than a typical current issue would.
(B) The majority of the magazine's subscribers are less concerned about a possible reduction in the quantity of the magazine's articles than about a possible loss of the current high quality of its articles.
(C) Many of the magazine's long-time subscribers would continue their subscriptions even if the subscription price were increased.
(D) Most of the advertisers that purchase advertising space in the magazine will continue to spend the same amount on advertising per issue as they have in the past.
(E) Production costs for the magazine are expected to remain stable
Senior Manager
Joined: 31 May 2006
Posts: 350
Location: Phoenix AZ

### Show Tags

13 Aug 2006, 19:46
1
InDeed.

Direct impact on the profits of the mag.
SVP
Joined: 30 Mar 2006
Posts: 1699

### Show Tags

13 Aug 2006, 21:43
1
Will go with D.

Number of issue decreases, also advertisers will maintain the current level of advertising which is based on the number of issues published.
GMAT Club Legend
Joined: 29 Jan 2005
Posts: 5092

### Show Tags

14 Aug 2006, 06:49

2:32

Senior Manager
Joined: 15 Jan 2008
Posts: 260
Because postage rates are rising, Home Decorator magazine  [#permalink]

### Show Tags

Updated on: 13 Oct 2013, 23:03
Because postage rates are rising, Home Decorator magazine plans to maximize its profits by reducing by one half the number of issues it publishes each year. The quality of articles, the number of articles published per year, and the subscription price will not change. Market research shows that neither subscribers nor advertisers will be lost if the magazine’s plan is instituted.

Which of the following, if true, provides the strongest evidence that the magazine’s profits are likely to decline if the plan is instituted?

(A) With the new postage rates, a typical issue under the proposed plan would cost about one-third more to mail than a typical current issue would.
(B) The majority of the magazine’s subscribers are less concerned about a possible reduction in the quantity of the magazine’s articles than about a possible loss of the current high quality of its articles.
(C) Many of the magazine’s long-time subscribers would continue their subscriptions even if the subscription price were increased.
(D) Most of the advertisers that purchase advertising space in the magazine will continue to spend the same amount on advertising per issue as they have in the past.
(E) Production costs for the magazine are expected to remain stable.

Originally posted by Neochronic on 14 Mar 2008, 11:57.
Last edited by WaterFlowsUp on 13 Oct 2013, 23:03, edited 1 time in total.
CEO
Joined: 17 Nov 2007
Posts: 3484
Concentration: Entrepreneurship, Other
Schools: Chicago (Booth) - Class of 2011
GMAT 1: 750 Q50 V40

### Show Tags

14 Mar 2008, 12:41
1
1
D

...Home Decorator magazine plans to maximize its profits by reducing by one half the number of issues it publishes each year. .....

(D) Most of the advertisers that purchase advertising space in the magazine will continue to spend the same amount on advertising per issue as they have in the past.

_________________

HOT! GMAT TOOLKIT 2 (iOS) / GMAT TOOLKIT (Android) - The OFFICIAL GMAT CLUB PREP APP, a must-have app especially if you aim at 700+ | PrepGame

SVP
Joined: 29 Aug 2007
Posts: 2419

### Show Tags

14 Mar 2008, 22:33
Neochronic wrote:
Because postage rates are rising, Home Decorator magazine plans to maximize its profits by reducing by one half the number of issues it publishes each year. The quality of articles, the number of articles published per year, and the subscription price will not change. Market research shows that neither subscribers nor advertisers will be lost if the magazine’s plan is instituted.Which of the following, if true, provides the strongest evidence that the magazine’s profits are likely to decline if the plan is instituted?

(A) With the new postage rates, a typical issue under the proposed plan would cost about one-third more to mail than a typical current issue would.
(B) The majority of the magazine’s subscribers are less concerned about a possible reduction in the quantity of the magazine’s articles than about a possible loss of the current high quality of its articles.
(C) Many of the magazine’s long-time subscribers would continue their subscriptions even if the subscription price were increased.
(D) Most of the advertisers that purchase advertising space in the magazine will continue to spend the same amount on advertising per issue as they have in the past.
(E) Production costs for the magazine are expected to remain stable.
D. its like a verbal math-type question.
_________________

Gmat: http://gmatclub.com/forum/everything-you-need-to-prepare-for-the-gmat-revised-77983.html

GT

Director
Joined: 05 Jan 2008
Posts: 666

### Show Tags

14 Mar 2008, 22:53
This is a clear D
(A) With the new postage rates, a typical issue under the proposed plan would cost about one-third more to mail than a typical current issue would.-> irrelevant, eliminate it
(B) The majority of the magazine’s subscribers are less concerned about a possible reduction in the quantity of the magazine’s articles than about a possible loss of the current high quality of its articles.-> quality of articles would remain same so this is not an issue,eliminate it

(C) Many of the magazine’s long-time subscribers would continue their subscriptions even if the subscription price were increased.-> this would actually increase the profits, however increase of price is not the questions, thus irrelevant, eliminate it

(D) Most of the advertisers that purchase advertising space in the magazine will continue to spend the same amount on advertising per issue as they have in the past.->Thus if the company reduces the # of magazines per year to 1/2 then the company clearly loosed 1/2 of the revenue generated on the advertising,

(E) Production costs for the magazine are expected to remain stable.-> irrelevant, eliminate it
_________________

Persistence+Patience+Persistence+Patience=G...O...A...L

Director
Joined: 10 Sep 2007
Posts: 909

### Show Tags

08 Aug 2008, 11:46
IMO D. If advertisers still spend same amount per issue, then advertising revenue will go down.
VP
Joined: 17 Jun 2008
Posts: 1279

### Show Tags

08 Aug 2008, 19:33
abhijit_sen wrote:
IMO D. If advertisers still spend same amount per issue, then advertising revenue will go down.

Why not A ,since A also affects the profit?
_________________

cheers
Its Now Or Never

Senior Manager
Joined: 06 Apr 2008
Posts: 390

### Show Tags

08 Aug 2008, 20:00
2
spriya wrote:
abhijit_sen wrote:
IMO D. If advertisers still spend same amount per issue, then advertising revenue will go down.

Why not A ,since A also affects the profit?

Because of increase in postal rates company has devised the plan to reduce issues into half. So this part is already covered.
Intern
Joined: 02 Apr 2010
Posts: 31

### Show Tags

02 Apr 2010, 13:20
IMO D

D: Ads/issue.. if the number of issues are reduced to half, so is the revenue from ads
Manager
Joined: 07 Jan 2010
Posts: 207

### Show Tags

04 Apr 2010, 07:47
1
Good question.
If you don't read well enough you might miss the ad revenue/issue, and then A looks a good choice.
Director
Status: Prep started for the n-th time
Joined: 29 Aug 2010
Posts: 560
Re: Matter of selecting whats the main point  [#permalink]

### Show Tags

12 Jun 2011, 19:18
Clear D.

If new no of issues = Half the number of old issues and the money spent by advertizers is anything less than twice as before, there will be loss of advertisizing revenue. Hence D

Crick
Manager
Joined: 16 Mar 2011
Posts: 170
Re: Matter of selecting whats the main point  [#permalink]

### Show Tags

12 Jun 2011, 20:22
since advertising dollars are per issue in D, the right answer is D
VP
Status: There is always something new !!
Affiliations: PMI,QAI Global,eXampleCG
Joined: 08 May 2009
Posts: 1124
Re: Matter of selecting whats the main point  [#permalink]

### Show Tags

13 Jun 2011, 02:28
D shows that advertising revenues will decrease.
_________________

Visit -- http://www.sustainable-sphere.com/
Promote Green Business,Sustainable Living and Green Earth !!

Retired Moderator
Status: Flying over the cloud!
Joined: 17 Aug 2011
Posts: 750
Location: Viet Nam
GMAT Date: 06-06-2014
GPA: 3.07
Re: Because postage rates are rising Home Decorator magazine  [#permalink]

### Show Tags

22 Nov 2011, 20:53
D is correct one. Advertiser spend money based on the number of issues published. If the number of issues decrease, the profits will definitely decrease.
_________________

Rules for posting in verbal gmat forum, read it before posting anything in verbal forum
Giving me + 1 kudos if my post is valuable with you

The more you like my post, the more you share to other's need

CR: Focus of the Week: Must be True Question

Intern
Joined: 04 Dec 2011
Posts: 3
Re: Because postage rates are rising Home Decorator magazine  [#permalink]

### Show Tags

Updated on: 10 Dec 2011, 07:44
Damn sure this should be D.
Thanks man

cheap koozies

Originally posted by bluee on 08 Dec 2011, 07:50.
Last edited by bluee on 10 Dec 2011, 07:44, edited 1 time in total.
Manager
Joined: 27 Oct 2011
Posts: 158
Location: United States
Concentration: Finance, Strategy
GPA: 3.7
WE: Account Management (Consumer Products)
Re: Because postage rates are rising Home Decorator magazine  [#permalink]

### Show Tags

08 Dec 2011, 23:50
Didn't read the answer choices that carefully. But now that it's mentioned D seems like the correct answer.

If issues go down and ad goes down with it. lower revenue.
_________________

DETERMINED TO BREAK 700!!!

Manager
Joined: 28 Sep 2011
Posts: 166
Re: Because postage rates are rising Home Decorator magazine  [#permalink]

### Show Tags

25 Mar 2012, 10:15
1
The answer to this question is D:

The question stem is a little tricky because it is actually a weaken question, but the initial wording may appear to be a strengthen question.

A. If postage rates only increased by 1/3 and the number of issues is reduced by 1/2, this means that the company will still have cost savings. Therefore, this will not lead to a decrease in profits.

B. This is irrelevant. Whether individuals are concerned about quantity or quality of the magazine does not appear to affect the profits of the company.

C. This presents only a hypothetical situation. Therefore, we are not sure how this would actually affect the profits at all.

D. This is the correct answer. The reason is because if the advertising amount is the same per issue and the number of issues has decreased by 1/2, then the company is losing 1/2 the advertising revenue. This could result in decreased profits.

E. If production costs are stable, and the subscription price has not changed, there is no reason to believe that profits will change at all.
Re: Because postage rates are rising Home Decorator magazine &nbs [#permalink] 25 Mar 2012, 10:15

Go to page    1   2   3    Next  [ 44 posts ]

Display posts from previous: Sort by

# Events & Promotions

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.