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# Last year, construction in the city of Vonter, including the

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Intern
Joined: 13 Oct 2011
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Last year, construction in the city of Vonter, including the  [#permalink]

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17 Jan 2012, 23:13
2
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Difficulty:

25% (medium)

Question Stats:

84% (02:25) correct 16% (02:30) wrong based on 56 sessions

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Last year, construction in the city of Vonter, including the rewiring of telephone and cable lines, caused the cost of providing cable television service to homes within the city to increase by 12 percent as compared to the previous year. In response, all cable companies in the city increased the price of their monthly service to customer. Broadcast Television Cable Company has found, however, that the proportion of cable bills paid on time decreased sharply the six months after raising the price of monthly service but returned to the previous year's level by the end of the year.

Which of the following, if true, most helps to explain the change between the first half and the second half of the year in the proportion of cable bills not paid on time to Broadcast Television Cable Company?

(A) The total number of homes subscribing to cable service within Vonter increased between the first and second half of the year.
(B) Between the first and second half of the year, Broadcast Television Cable Company, unlike other cable service providers in Vonter, increased the number of channels that it offers to customers.
(C) Because Broadcast Television Cable Company provides only a premium cable package, a large portion of its subscribers who could no longer afford this package switched to another provider by the second half of the year. correct
(D) In order to attract more subscribers, all cable service providers in Vonter offered promotional sign-up packages that began in the second half of the year.
(E) The rewiring of telephone and cable lines in Vonter caused other businesses, such as telephone companies that had provided service to landlines, to suffer, and thus many workers in Vonter were laid off immediately after the construction was completed.

My doubt is - the explanation given for the correct answer.Choice C best explains this situation. According to C, out of the total number of subscribers to Broadcast Television Company, the portion of those who could no longer afford the service due to a price increase (those most likely to pay their bills late) switched to a cheaper service. The pool of subscribers left in the second half of the the year would be more likely to pay their bills on time because these subscribers could afford this package.
Can someone pls offer better explanation?
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18 Jan 2012, 01:43
2
@priyankaparanjape
lets take an example..Broadcast Television Cable had 100 customers out of which 50 were depositing bill in time..consider this case was in existence before the first quarter
since they offer premium packages, whose rates were further raised...so a large number of people who could not afford switched to another operator
so lets take out of 100,25 have switched
the proportion before first half of those paying in time = 50/100 =1/2 = .50
and the proportion between first n second half = 50/75 =2/3 = .667
hence this option(C) explains
hope this explanation helps.
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31 May 2012, 23:02
why on earth wud u mark the answer right next to the answer choice ?
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05 Jun 2012, 01:48
priyankaparanjape wrote:
Last year, construction in the city of Vonter, including the rewiring of telephone and cable lines, caused the cost of providing cable television service to homes within the city to increase by 12 percent as compared to the previous year. In response, all cable companies in the city increased the price of their monthly service to customer. Broadcast Television Cable Company has found, however, that the proportion of cable bills paid on time decreased sharply the six months after raising the price of monthly service but returned to the previous year's level by the end of the year.

Which of the following, if true, most helps to explain the change between the first half and the second half of the year in the proportion of cable bills not paid on time to Broadcast Television Cable Company?

(C) Because Broadcast Television Cable Company provides only a premium cable package, a large portion of its subscribers who could no longer afford this package switched to another provider by the second half of the year.
Can someone pls offer better explanation?

Let I try to explain this question.

Total # of subscriber in BTCC in the 1st 6 months = 10.000
# of subscriber who pay on time in the first 6 months = 6.000
# of subscribers who pay off time in the first 6 months = 4.000 (in which, there are about 2.000 subscribers were using premium package). Then, 1.000 subscribers changed to other providers.
The proportion = 6.000/10.000 = 3/5 = 9/15

Total # of subscribers in BTCC in the last 6 months = 9.000.
# of subscriber who pay on time in the last 6 months = 6.000
# of subscribers who pay off time in the last 6 months = 3.000
The proportion = 6.000/9.000 = 2/3 = 10/15

3/5<2/3 => we get the correct answer.
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Re: Last year, construction in the city of Vonter, including the  [#permalink]

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20 Mar 2018, 09:55
I remember that gmatclub test has a familiar question about credit, and paying debts on time between the first and the second year. The answer is that the customers, or those who own debts, no longer exist to pay the bill on time.
Re: Last year, construction in the city of Vonter, including the &nbs [#permalink] 20 Mar 2018, 09:55
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