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manalq8
Joined: 12 Apr 2011
Last visit: 12 Feb 2012
Posts: 106
Given Kudos: 52
Status:D-Day is on February 10th. and I am not stressed
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Concentration: finance and international business
Schools:Columbia university
GPA: 3.48
A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
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Question Stats:
85% (01:49) correct
15%
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wrong
based on 2020
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Local phone companies have monopolies on phone service within their areas. Cable television can be transmitted via the wires that are already in place and owned by the phone companies. Cable television companies argue that if the telephone companies were to offer cable service, these telephone companies would have an unfair advantage, because their cable transmissions could be subsidized by the profits of their monopolies on phone service.
Which of the following, if true, would ease the cable companies’ fear of unfair competition?
(A) In order to use existing telephone wire, telephone companies would need to modernize their operations, a process so expensive it would virtually wipe out all profit from their monopoly for the foreseeable future.
(B) If a phone company were to offer cable service within a particular area, it would have a monopoly within that area.
(C) The cost of television service, whether provided by cable or telephone companies, scales; that is, the total cost of transmission rises only marginally as more homes are added to the network.
(D) Cable programming that offers more channels is already available through satellite dish, but the initial cost of the dish is extremely high.
(E) Cable television will never be able to compete with the burgeoning video rental industry, especially as more homes now have video cassette recorders than ever did before.
Which of the following, if true, would ease the cable companies’ fear of unfair competition?
(A) In order to use existing telephone wire, telephone companies would need to modernize their operations, a process so expensive it would virtually wipe out all profit from their monopoly for the foreseeable future.
(B) If a phone company were to offer cable service within a particular area, it would have a monopoly within that area.
(C) The cost of television service, whether provided by cable or telephone companies, scales; that is, the total cost of transmission rises only marginally as more homes are added to the network.
(D) Cable programming that offers more channels is already available through satellite dish, but the initial cost of the dish is extremely high.
(E) Cable television will never be able to compete with the burgeoning video rental industry, especially as more homes now have video cassette recorders than ever did before.
18 Jan 2012, 15:48
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Cable companies argue that telephone companies would have an unfair advantage if they (the telephone companies) offer cable. The unfair advantage is based on the fact that telephone companies could use the profits from their monopoly on the local market to pay for cables transmissions.
We are looking for the answer choice that most weakens this claim.
(A) This answer gives a clear reason for why the cable companies' fears are unfounded. All the money that telephone companies make from their monopoly would be spent on "moderating their operations." (A) goes on to say that this overhaul would completely sap the companies' financial reserves for a long time to come.
Because the telephone companies stand to lose so much money from cable transmissions they are not, as the cable companies argue, at an unfair advantage.
I hope that makes sense
We are looking for the answer choice that most weakens this claim.
(A) This answer gives a clear reason for why the cable companies' fears are unfounded. All the money that telephone companies make from their monopoly would be spent on "moderating their operations." (A) goes on to say that this overhaul would completely sap the companies' financial reserves for a long time to come.
Because the telephone companies stand to lose so much money from cable transmissions they are not, as the cable companies argue, at an unfair advantage.
I hope that makes sense
18 Jan 2012, 19:47
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Argument Conclusion: Telephone companies can subsidize cable business with "profits" from phone operations.
A. Says profits won't exist so no subsidy from phone business possible.
A is the correct answer.
A. Says profits won't exist so no subsidy from phone business possible.
A is the correct answer.
19 Jan 2012, 08:03
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A is the answer it clearly says that the profits would be wiped out due to an initial investment .Therefore the telephone companies cannot provide channels at a subsidized rate !!
