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# Local phone companies have monopolies on phone service

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VP
Joined: 22 Nov 2007
Posts: 1079

Kudos [?]: 678 [0], given: 0

Local phone companies have monopolies on phone service [#permalink]

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08 Feb 2008, 06:20
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Difficulty:

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Question Stats:

0% (00:00) correct 100% (00:00) wrong based on 1 sessions

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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.

On the basis of the information provided in the passage above, which of the following questions can be answered?
(A) Are phone companies as efficient as cable companies in providing reliable and inexpensive service?
(B) If phone companies were allowed to provide cable service, would they want to do so?
(C) Do the cable companies believe that the local phone companies make a profit on phone service?
(D) Are local phone companies forbidden to offer cable service?
(E) Is it expected that phone companies will have a monopoly on cable service?

Kudos [?]: 678 [0], given: 0

CEO
Joined: 17 Nov 2007
Posts: 3584

Kudos [?]: 4579 [0], given: 360

Concentration: Entrepreneurship, Other
Schools: Chicago (Booth) - Class of 2011
GMAT 1: 750 Q50 V40
Re: cr - 1000 test 1-16 [#permalink]

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08 Feb 2008, 07:09
C

(C) Do the cable companies believe that the local phone companies make a profit on phone service?

It is the best for me:
"Cable television companies argue that .... could be subsidized by the profits of their monopolies on phone service.
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Kudos [?]: 4579 [0], given: 360

Director
Joined: 26 Jul 2007
Posts: 535

Kudos [?]: 180 [0], given: 0

Schools: Stern, McCombs, Marshall, Wharton
Re: cr - 1000 test 1-16 [#permalink]

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08 Feb 2008, 13:03
walker wrote:
C

(C) Do the cable companies believe that the local phone companies make a profit on phone service?

It is the best for me:
"Cable television companies argue that .... could be subsidized by the profits of their monopolies on phone service.

Agreed. Perfect Explanation.

Kudos [?]: 180 [0], given: 0

Re: cr - 1000 test 1-16   [#permalink] 08 Feb 2008, 13:03
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