One recent example of industrial hyper growth has taken place in the r

One recent example of industrial hyper growth has taken place in the recycling industry, led by the rapid expansion of the recycled paper market. Though many laws were enacted in the late 1980s to encourage (and in some cases require) the collection of waste paper for recycling, there were not, at that time, companies with sufficient capacity to recycle it all. Consequently the collected paper accumulated in storage, usually at the expense of the recycling companies, thereby adding to their overhead and squeezing their already thin profit margins.

Today a different situation exists. Fifty-seven new paper mills have been built since 1991, and of these, at least twenty-nine use recycled fiber. This surge in capacity has resulted in a concurrent rise in profits. The price per Ton of waste paper has quadrupled in the past year, as have the prices of corrugated cardboard and used newsprint. Trash haulers have benefited from these conditions by combining their trash hauling and recycling operations.

Recycling centers are connected both to the clients to whom they sell end products and to those from whom they collect refuse; thus, the company gets paid twice for the same trash, once for hauling the waste and once for selling the usable material. Industry profits have increased more than tenfold during this period. As the industry has become more competitive, some haulers have chosen to rebate a portion of this money to their clients in the hopes of ensuring their loyalty.

1. According to the passage, which of the following is a reason for the increase in profits in the trash hauling business?

(A) Haulers' ability to sell both services and products.
(B) Money offered by haulers to preferred customers.
(C) Foresight exhibited by the leaders of the industry.
(D) Haulers' willingness to adapt technology to a changing industry.
(E) Passage of stricter environmental legislation.


2. It can be inferred from the passage that the price of waste paper
(A) will increase steadily over the next few years
(B) will increase as more companies get involved in the industry
(C) is closely related to the availability of trash haulers
(D) is not as important to trash haulers as the price they charge for hauling waste
(E) is sometimes set by the weight of the product


3. The author of the passage would most likely agree with which of the following?
A. Competition between trash haulers and recyclers will prevent the recycled paper industry from reaching its full economic potential.
B. Pressure from anti-environmental groups has increased pressure on the government to oppose recycled paper initiatives.
C. The recycled paper industry may continue to grow at its present rate as long as the industry remains profitable.
D. The profit-seeking of recyclers have overshadowed environmental concerns in the recycled paper industry.
E. Government negligence prevented the recycled paper industry from becoming successful until the early 1990’s.


4. According to the passage, all of the following are results of the increase in the number of new mills using recycled finer except
A. The price of waste paper has risen dramatically.
B. Trash haulers are earning increased revenues.
C. Profits at recycling centers have increased more than tenfold.
D. The price of corrugated cardboard has risen.
E. Trash haulers have been forced to compete with recyclers.