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655-705 Level|   Assumption|      
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Bunuel
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In Varisland, when a subscriber of one telecom operator calls a subscr 27 May 2022, 03:01
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65% (hard)

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58% (02:02) correct 42% (02:12) wrong based on 309 sessions

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In Varisland, when a subscriber of one telecom operator calls a subscriber of a different telecom ope­­­­­rator, the latter’s telecom company charges a small connection fee to the originating operator, a fee stipulated by the regulator and same for every operator. Almost all the new telecom operators are enticing customers by charging much lower call rates than charged by the existing operators. Since the connection fee is one of the sources of revenue for new companies, an increase in the fee will significantly improve the financials of the new operators and enable them to compete better in the market.

Which of the following statements is an assumption made by the author?


A. The regulator will most probably agree with the author’s recommended course of action

B. To improve the financials of the new companies, all the possible sources of revenues should be utilized in the best manner possible.

C. One of the goals of the regulator is to make the telecom market highly competitive, which will ensure consumer welfare.

D. For the new telecom operators, the connection fee does not form an insignificant proportion of their revenues

E. New companies will not have to pay increased connection fee to the existing companies
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D
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In Varisland, when a subscriber of one telecom operator calls a subscr 02 Jun 2022, 08:50
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A. The regulator will most probably agree with the author’s recommended course of action Incorrect

cant be an assumption

B. To improve the financials of the new companies, all the possible sources of revenues should be utilized in the best manner possible. Incorrect

weakens conclusion, increase fee is not enough to make a competitive market

C. One of the goals of the regulator is to make the telecom market highly competitive, which will ensure consumer welfare. Correct

possible assumption,

D. For the new telecom operators, the connection fee does not form an insignificant proportion of their revenues Incorrect

so that action will not be helpful for new companies

E. New companies will not have to pay increased connection fee to the existing companies Incorrect

contradicts with argument
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In Varisland, when a subscriber of one telecom operator calls a subscr 04 Jun 2022, 11:20
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Although I see why "D" is correct, I am unable to eliminate E. Could anyone help?
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In Varisland, when a subscriber of one telecom operator calls a subscr 04 Jun 2022, 11:42
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Jaychoudhary
Although I see why "D" is correct, I am unable to eliminate E. Could anyone help?
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Because (E) contradicts the premise- "a fee stipulated by the regulator and same for every operator."
So, as the "fee" will be same, they all (including new companies) will have to pay.

Hope it helps.

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In Varisland, when a subscriber of one telecom operator calls a subscr 04 Jun 2022, 12:32
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Jaychoudhary
Although I see why "D" is correct, I am unable to eliminate E. Could anyone help?
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(E) is not an assumption of the argument. It actually contradicts what the passage says. After all, the passage says, "a fee stipulated by the regulator and same for every operator."

However, (E) brings up an important point, which is the following.

Since all the operators pay the fee to each other, the fees paid by the operators to each other should cancel out, with the result that the argument's underlying idea, which is that the fees can be financially beneficial for the new operators, is logically impossible.
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In Varisland, when a subscriber of one telecom operator calls a subscr 06 Jun 2022, 01:14
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Sorry but why is E wrong?

Let's say there is an existing telco named "A" and a new player enters the market named "B".

Now, since B is new it won't have as many customers as A would and therefore, the number of people calling from A to B would be more than the number of people calling from B to A. Following this logic B will receive more "connection fees" (CF) since CF is charged by the Telco reciveing the call.

Therefore the author would assume that the new telco will not be paying more fees (due to lower no. Of customers as compared to existing telcos) but would receive more if the CF is hiked by the regulator.

Let me know your thoughts. . IMO should be E

Bunuel
In Varisland, when a subscriber of one telecom operator calls a subscriber of a different telecom ope­­­­­rator, the latter’s telecom company charges a small connection fee to the originating operator, a fee stipulated by the regulator and same for every operator. Almost all the new telecom operators are enticing customers by charging much lower call rates than charged by the existing operators. Since the connection fee is one of the sources of revenue for new companies, an increase in the fee will significantly improve the financials of the new operators and enable them to compete better in the market.

Which of the following statements is an assumption made by the author?


A. The regulator will most probably agree with the author’s recommended course of action

B. To improve the financials of the new companies, all the possible sources of revenues should be utilized in the best manner possible.

C. One of the goals of the regulator is to make the telecom market highly competitive, which will ensure consumer welfare.

D. For the new telecom operators, the connection fee does not form an insignificant proportion of their revenues

E. New companies will not have to pay increased connection fee to the existing companies
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In Varisland, when a subscriber of one telecom operator calls a subscr 04 Aug 2023, 01:32
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MartyTargetTestPrep
Jaychoudhary
Although I see why "D" is correct, I am unable to eliminate E. Could anyone help?
(E) is not an assumption of the argument. It actually contradicts what the passage says. After all, the passage says, "a fee stipulated by the regulator and same for every operator."

However, (E) brings up an important point, which is the following.

Since all the operators pay the fee to each other, the fees paid by the operators to each other should cancel out, with the result that the argument's underlying idea, which is that the fees can be financially beneficial for the new operators, is logically impossible.
Show more
MartyTargetTestPrep

But in argument it says the increased connection fee will improve financials.So if we do negation that new companies have to pay increased amount then it will weaken the claim.

Author assuming that at destination end( new companies )should be there more timr as compared to originating end. so if there will be increased connection fee then new companies will have more revenue.

if you say last option is contradicting shouldn't we consider this info the regulator should increase the connection fee so that the financials of the new telecom operators improve

if yes then how to separately view.
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