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Cross-border collaboration is experiencing a modest

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Cross-border collaboration is experiencing a modest  [#permalink]

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New post 07 Aug 2010, 07:21
2
9
00:00
A
B
C
D
E

Difficulty:

  85% (hard)

Question Stats:

51% (01:45) correct 49% (02:10) wrong based on 543 sessions

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Cross-border collaboration is experiencing a modest renaissance among smaller international oil cartels based in South America, even if business from a joint venture by several cartels is less brisk and profitable than by a monopoly. One upside of international cooperation is that a combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate.

Which of the following statements by a South American cartel accountant best fits the situation of South American cartels as described in the passage above?

A. “We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”

B. “Our management believes that it is in the best interests of investors that we earn only a percentage of total profits and risk only a percentage of possible losses rather than assuming the entire risk of loss.”

C. “We should cooperate and build goodwill, rather than turn customers against us with unsupervised competition.”

D. “We would prefer to have Middle Eastern cartels work with us here in South America rather than having to participate in joint ventures in their home countries.”

E. “We would rather use our full resources to penetrate a territory than receive lesser profits in joint ventures.”

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New post 07 Aug 2010, 08:54
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Straight A - "jointly win government subsidies" is the key. Its better to collaborate than be a looser - "where they would not have been able to operate."

A. “We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”
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New post 08 Aug 2010, 14:54
can someone explain why D is incorrect here?
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New post 08 Aug 2010, 20:38
seekmba wrote:
can someone explain why D is incorrect here?


D is incorrect because it is not mentioned in the premise where the join venture will be, whether it'll be in the home base or in the other's country. The premise only focus on the profitability of the Join venture.

A is the Correct answer.
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New post 23 Aug 2010, 05:20
A looks good :-)
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Re: Cross-border collaboration is experiencing a modest  [#permalink]

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New post 21 Oct 2015, 08:29
Can someone explain why B is incorrect?

Thanks much!
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Re: Cross-border collaboration is experiencing a modest  [#permalink]

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New post 05 Nov 2015, 05:57
angierch wrote:
Can someone explain why B is incorrect?

Thanks much!

" combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate."

the gist of the argument is make some profit by joint ventures than nothing at all.the above sentence clearly gives that clue.
Option A states that clearly.
whereas option B talks about investors and losses..according to the argument we have no information if they would incur losses.
If they cant operate there is no question of incurring losses in overseas market.
Hence in my opinion it is wrong.
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Re: Cross-border collaboration is experiencing a modest  [#permalink]

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New post 11 Jul 2016, 22:44
gmatbull wrote:
Cross-border collaboration is experiencing a modest renaissance among smaller international oil cartels based in South America, even if business from a joint venture by several cartels is less brisk and profitable than by a monopoly. One upside of international cooperation is that a combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate.

Which of the following statements by a South American cartel accountant best fits the situation of South American cartels as described in the passage above?

A. “We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”

B. “Our management believes that it is in the best interests of investors that we earn only a percentage of total profits and risk only a percentage of possible losses rather than assuming the entire risk of loss.”

C. “We should cooperate and build goodwill, rather than turn customers against us with unsupervised competition.”

D. “We would prefer to have Middle Eastern cartels work with us here in South America rather than having to participate in joint ventures in their home countries.”

E. “We would rather use our full resources to penetrate a territory than receive lesser profits in joint ventures.”


Can someone explain why 'B' is wrong.
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Cross-border collaboration is experiencing a modest  [#permalink]

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New post 31 Dec 2017, 03:54
Cross-border collaboration is experiencing a modest renaissance among smaller international oil cartels based in South America, even if business from a joint venture by several cartels is less brisk and profitable than by a monopoly. One upside of international cooperation is that a combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate.

B. “Our management believes that it is in the best interests of investors that we earn only a percentage of total profits and risk only a percentage of possible losses rather than assuming the entire risk of loss.”

They would not have been able to operate -> there would be no loss yet, overseas market is an opportunity for them. So B is out.
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Re: Cross-border collaboration is experiencing a modest  [#permalink]

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New post 31 Dec 2017, 16:33
gmatbull wrote:
Cross-border collaboration is experiencing a modest renaissance among smaller international oil cartels based in South America, even if business from a joint venture by several cartels is less brisk and profitable than by a monopoly. One upside of international cooperation is that a combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate.

Which of the following statements by a South American cartel accountant best fits the situation of South American cartels as described in the passage above?

A. “We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”

B. “Our management believes that it is in the best interests of investors that we earn only a percentage of total profits and risk only a percentage of possible losses rather than assuming the entire risk of loss.”

C. “We should cooperate and build goodwill, rather than turn customers against us with unsupervised competition.”

D. “We would prefer to have Middle Eastern cartels work with us here in South America rather than having to participate in joint ventures in their home countries.”

E. “We would rather use our full resources to penetrate a territory than receive lesser profits in joint ventures.”


A. The sentence, "even if business from a joint venture by several cartels is less risk and profitable than by a monopoly", suggests that joint venture is less risk, less reward while monopolies are high risk, high reward; the situation of South American cartels is a shift from competition to joint/cooperative venture; a consistent modest profitability is preferred over a volatile profitability, which is best summary of the situation in SA. B is incorrect because it talks about the investors too much while the actual text makes no mention of them; plus, the parts about percentages is too wordy/akward, whereas with A it is phrased better. C is incorrect because it assumes too much on good will and unsupervised competition, when that is not the subject of the situation. D is wrong because the middle east is not mentioned, and it is irrelevant to profit/percentage. E is wrong because it talks about penetrating territory --- What territory? Irrelevant. The rest eliminated, A is the best answer choice.
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Re: Cross-border collaboration is experiencing a modest  [#permalink]

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New post 31 Dec 2017, 17:56
even if business from a joint venture by several cartels is less brisk and profitable than by a monopoly.

I dont think it is brisk but rather risk

Only A answers it "We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”
Re: Cross-border collaboration is experiencing a modest &nbs [#permalink] 31 Dec 2017, 17:56
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