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In 1994, TipTop Airlines reported an increase in the total number of

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Bunuel
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In 1994, TipTop Airlines reported an increase in the total number of [#permalink] New post   07 Mar 2023, 02:30
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In 1994, TipTop Airlines reported an increase in the total number of passengers it carried from the year before, but a decrease in total revenues — even though prices for its tickets on all routes remained unchanged during the two-year period.

Which of the following, if true, best reconciles the apparent paradox described above?


A. TipTop Airlines was a victim of a mild recession in 1994.

B. Total passenger miles were up in 1994.

C. Fuel costs remained constant during the two-year period.

D. Passengers traveled shorter (and thus less expensive) distances in 1994.

E. TipTop did not buy any new airplanes or equipment in 1994.


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Re: In 1994, TipTop Airlines reported an increase in the total number of [#permalink] New post   07 Mar 2023, 06:35
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A) While this is what some would pick because it is a plausible answer, even if it were the victim of a mild recession, it does not explain how it was able to have more clients but lower revenues

B) If anything, this deepens the paradox - you would expect that more miles translates to higher revenues.

C) This is a trap choice. We are worried about revenues, not profits. The cost of fuel is not relevant here since we are just looking at revenues.

D) Good choice. If this is true, then it means that although it got more passengers, the passengers traveled less and thus spend less on each ticket (so the airline earned less per ticket). Making it possible that, despite the increased number of passengers, the revenues are now lower.

E) Not relevant to the question at all.
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In 1994, TipTop Airlines reported an increase in the total number of [#permalink] New post   07 Mar 2023, 23:14
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Bunuel wrote:
In 1994, TipTop Airlines reported an increase in the total number of passengers it carried from the year before, but a decrease in total revenues — even though prices for its tickets on all routes remained unchanged during the two-year period.

Which of the following, if true, best reconciles the apparent paradox described above?


A. TipTop Airlines was a victim of a mild recession in 1994.

B. Total passenger miles were up in 1994.

C. Fuel costs remained constant during the two-year period.

D. Passengers traveled shorter (and thus less expensive) distances in 1994.

E. TipTop did not buy any new airplanes or equipment in 1994.



IMO D is the best answer. Just basic logic that if number of passenger increased from 100 >> 150 and the prices remained exactly the same, then the product is lower only when the price is lower. That means people chose to travel cheaper flights and that is what D says exactly.
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Re: In 1994, TipTop Airlines reported an increase in the total number of [#permalink] New post   01 Apr 2023, 02:00
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In 1994, TipTop Airlines reported an increase in the total number of passengers it carried from the year before, but a decrease in total revenues — even though prices for its tickets on all routes remained unchanged during the two-year period.

Which of the following, if true, best reconciles the apparent paradox described above?

First, restate the contradiction in your own words. “TipTop’s profits went down even though they flew more passengers.” Now, let’s see which of the answer choices makes both of the facts in the argument true.


A. TipTop Airlines was a victim of a mild recession in 1994.

If TipTop was affected by a recession, that might explain a loss of revenues. But because ticket prices remained the same, it would not explain how the number of passengers could have increased at the same time. Eliminate it.


B. Total passenger miles were up in 1994.

If total passenger miles were up, and prices remained the same, there is no way that there could have been a loss of revenues. We can eliminate this choice as well.


C. Fuel costs remained constant during the two-year period.

If fuel costs had not remained constant, the company’s profits might have fallen. An increase in fuel prices could have increased its costs and cut into profits. But it would not have cut into total revenues, which is what we are concerned with in this passage. Of course, because choice C told us that the costs remained constant, this choice has no bearing on the argument at all. Eliminate it.


D. Passengers traveled shorter (and thus less expensive) distances in 1994.

Bingo! If passengers traveled on short, inexpensive flights, then they paid less money. In spite of the increase in number of passengers, the money they paid could have added up to less than that of the year before. This is the best answer, but always remember to read all the choices anyway.


E. TipTop did not buy any new airplanes or equipment in 1994.

This answer is much like the third choice, which we call choice C. If TipTop had bought new planes, it might have cut into its profits, but it would not have had any bearing on revenues. Of course, because this choice told us that TipTop did not buy any planes, there is no relevance at all. Eliminate it.
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Re: In 1994, TipTop Airlines reported an increase in the total number of [#permalink]
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