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Because postage rates are rising, Home Decorator magazine

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Because postage rates are rising, Home Decorator magazine [#permalink]

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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
[Reveal] Spoiler: OA
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Re: CR: Magazine [#permalink]

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New post 13 Aug 2006, 17:36
here too D..
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New post 13 Aug 2006, 19:46
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InDeed.

Direct impact on the profits of the mag.
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New post 13 Aug 2006, 21:43
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.
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New post 14 Aug 2006, 06:49
(D). Less advertisement revenue means reduced overall profits.

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Because postage rates are rising, Home Decorator magazine [#permalink]

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New post 14 Mar 2008, 11:57
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.

Last edited by WaterFlowsUp on 13 Oct 2013, 23:03, edited 1 time in total.
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Re: Postage Rates [#permalink]

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New post 14 Mar 2008, 12:41
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.

Therefore, annual revenue from advertisement will halve.
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Re: CR Postage Rates [#permalink]

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New post 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.
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Re: CR Postage Rates [#permalink]

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New post 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
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Because postage rates are rising, Home Decorator magazine [#permalink]

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New post 08 Aug 2008, 11:38
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.
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Re: CR-profits [#permalink]

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New post 08 Aug 2008, 11:46
IMO D. If advertisers still spend same amount per issue, then advertising revenue will go down.
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New post 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?
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New post 08 Aug 2008, 19:58
spriya 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.


IMO D)
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Re: CR-profits [#permalink]

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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.
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New post 09 Aug 2008, 00:07
nmohindru wrote:
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.


oh ok my doubt cleared !!
OA is D
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Because postage rates are rising Home Decorator magazine [#permalink]

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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 IOSS 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
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Re: 13Q/Test14/1000CR [#permalink]

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New post 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
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Re: 13Q/Test14/1000CR [#permalink]

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New post 04 Apr 2010, 07:47
Good question.
D should be the answer.
If you don't read well enough you might miss the ad revenue/issue, and then A looks a good choice.
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Re: 13Q/Test14/1000CR [#permalink]

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New post 04 Apr 2010, 10:47
Thanku its D
Re: 13Q/Test14/1000CR   [#permalink] 04 Apr 2010, 10:47

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