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# In the United States, the Postal Service has a monopoly on

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Manager
Joined: 08 Jul 2009
Posts: 172
In the United States, the Postal Service has a monopoly on [#permalink]

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02 Aug 2009, 15:20
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Question Stats:

70% (02:38) correct 30% (02:00) wrong based on 84 sessions

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In the United States, the Postal Service has a monopoly on first-class mail, but much of what is sent first class could be transmitted electronically. Electronic transmittal operators argue that if the Postal Service were to offer electronic transmission, it would have an unfair advantage, since its electronic transmission service could be subsidized from the profits of the monopoly.

15. Which of the following, if each is true, would allay the electronic transmittal operators’ fears of unfair competition?

(A) If the Postal Service were to offer electronic transmission, it could not make a profit on first-class mail.
(B) If the Postal Service were to offer electronic transmission, it would have a monopoly on that kind of service.
(C) Much of the material that is now sent by first-class mail could be delivered much faster by special package couriers, but is not sent that way because of cost.
(D) There is no economy of scale in electronic transmission—that is, the cost per transaction does not go down as more pieces of information are transmitted.
(E) Electronic transmission will never be cost-effective for material not sent by first-class mail such as newspapers and bulk mail.

16. Which of the following questions can be answered on the basis of the information in the passage above?

(A) Is the Postal Service as efficient as privately owned electric transmission services?
(B) If private operators were allowed to operate first-class mail services, would they choose to do so?
(C) Do the electronic transmittal operators believe that the Postal Service makes a profit on first-class mail?
(D) Is the Postal Service prohibited from offering electronic transmission services ?
(E) Is the Postal Service expected to have a monopoly on electronic transmission?

[Reveal] Spoiler:
15- A, 16-C
Manager
Joined: 10 Jul 2009
Posts: 164
Re: In the United States, the Postal Service has a monopoly on [#permalink]

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02 Aug 2009, 17:10
15) A
If the Postal Service were to offer electronic transmission, it could not make a profit on first-class mail - Since no profits are made on first class mail, USPS cannot use any profits to subsidize electronic transmission.

16) C
Manager
Joined: 08 Jul 2009
Posts: 172
Re: In the United States, the Postal Service has a monopoly on [#permalink]

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02 Aug 2009, 17:35
correct. Can you explain your reasoning for C
Manager
Joined: 10 Jul 2009
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Re: In the United States, the Postal Service has a monopoly on [#permalink]

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02 Aug 2009, 18:00
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(C) Do the electronic transmittal operators believe that the Postal Service makes a profit on first-class mail - Electronic transmittal operators fear that USPS will have unfair advantage as their profits can be used to subsidize electronic transmission service. The profits are because of first class mail.
Director
Joined: 05 Jun 2009
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WE 1: 7years (Financial Services - Consultant, BA)
Re: In the United States, the Postal Service has a monopoly on [#permalink]

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03 Aug 2009, 04:33
Aleehsgonji wrote:
(C) Do the electronic transmittal operators believe that the Postal Service makes a profit on first-class mail - Electronic transmittal operators fear that USPS will have unfair advantage as their profits can be used to subsidize electronic transmission service. The profits are because of first class mail.

Nicely explained!
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Senior Manager
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Re: In the United States, the Postal Service has a monopoly on [#permalink]

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03 Aug 2009, 05:37
Agree wtih A and C
Manager
Joined: 28 Jul 2009
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Location: India
Schools: NUS, NTU, SMU, AGSM, Melbourne School of Business
Re: In the United States, the Postal Service has a monopoly on [#permalink]

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05 Aug 2009, 03:11
(A) and (C) it is.
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Joined: 15 May 2007
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Re: In the United States, the Postal Service has a monopoly on [#permalink]

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05 Aug 2009, 04:33
A and C
Manager
Joined: 22 Mar 2008
Posts: 53
Re: In the United States, the Postal Service has a monopoly on [#permalink]

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05 Aug 2009, 08:48
agree with A and C
Manager
Joined: 05 Jun 2012
Posts: 108
Schools: IIMA
Re: In the United States, the Postal Service has a monopoly on [#permalink]

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11 Jun 2014, 01:07
sher676 wrote:
In the United States, the Postal Service has a monopoly on first-class mail, but much of what is sent first class could be transmitted electronically. Electronic transmittal operators argue that if the Postal Service were to offer electronic transmission, it would have an unfair advantage, since its electronic transmission service could be subsidized from the profits of the monopoly.
15. Which of the following, if each is true, would allay the electronic transmittal operators’ fears of unfair competition?
(A) If the Postal Service were to offer electronic transmission, it could not make a profit on first-class mail.
(B) If the Postal Service were to offer electronic transmission, it would have a monopoly on that kind of service.
(C) Much of the material that is now sent by first-class mail could be delivered much faster by special package couriers, but is not sent that way because of cost.
(D) There is no economy of scale in electronic transmission—that is, the cost per transaction does not go down as more pieces of information are transmitted.
(E) Electronic transmission will never be cost-effective for material not sent by first-class mail such as newspapers and bulk mail.
16. Which of the following questions can be answered on the basis of the information in the passage above?
(A) Is the Postal Service as efficient as privately owned electric transmission services?
(B) If private operators were allowed to operate first-class mail services, would they choose to do so?
(C) Do the electronic transmittal operators believe that the Postal Service makes a profit on first-class mail?
(D) Is the Postal Service prohibited from offering electronic transmission services ?
(E) Is the Postal Service expected to have a monopoly on electronic transmission?

OA after some discussion

it is good question , I am trying to show some light on this :-

look at last sentence,"
Electronic transmittal operators argue that if the Postal Service were to offer electronic transmission, it would have an unfair advantage, since its electronic transmission service could be subsidized from the profits of the monopoly."

--->electronic service could be subsidized from profits of postal mail
15.) same thing -If the Postal Service were to offer electronic transmission, it could not make a profit on first-class mail- means profit can be used to bear the loss or as investment
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Manager
Joined: 18 Aug 2014
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GMAT 1: 740 Q47 V45
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Re: In the United States, the Postal Service has a monopoly on [#permalink]

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20 Sep 2014, 18:00
So question for each one why another answer is wrong:

1. D, why is D not correct? If the cost is the same they won't be making more money than they currently are?

2. E, why is E not correct? The last sentence is saying all this stuff is based on the profits from the monopoly, so the assumption is that it will in fact have a monopoly?
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Re: In the United States, the Postal Service has a monopoly on [#permalink]

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19 Jul 2016, 12:56
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: In the United States, the Postal Service has a monopoly on   [#permalink] 19 Jul 2016, 12:56
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