The supply of iron ore, the most important component in steelmaking

Question

The supply of iron ore, the most important component in steelmaking, has been steadily declining in Marco city. This has forced steel manufacturing units in Marco city to source iron ore from far off mines leading to an increase in their transportation costs. Because transportation costs make up a large chunk of the total cost of steelmaking, the steel

manufacturers in Marco city have had no option but to increase the selling price of their steel. This has, in turn, led to an increase in the retail price of utensils and other articles of daily use made of steel. Since the retail consumers now have to pay more for these steel items, while their earnings remain unchanged, they have decided to cut down on their nonessential expenditure such as that on movie tickets. This has led movie theatres in Marco city to reduce their ticket prices.

Which of the following provides the most support for the assertion that the prices of movie tickets in Marco city will continue to decline in future?

(A) The people of Marco city will not be willing to cut down their expenditure on eating out.

(B) After the inauguration of the Goldport Bridge, expected to happen very soon, the transportation costs to Marco city will be halved.

(C) There are no blockbuster movies with stellar star casts lined up for release anytime soon.

(D) The supply of iron ore to Marco city is expected to go down even more in the near future.

(E) Residents of Marco city view movie tickets as non-essential items of expenditure.

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Vardaan6117 · Answer

The assertion that movie ticket prices in Marco city will continue to decline relies on the ongoing pressure on consumers to reduce nonessential spending due to increased costs for steel items. Option (D) provides the most direct support for this by indicating that the supply of iron ore is expected to decrease further, which would perpetuate the chain of events: reduced iron ore supply leads to higher transportation costs for steel manufacturers, increased steel prices, higher retail prices for steel goods, and continued financial strain on consumers. This strain would force consumers to further cut nonessential expenditures, such as movie tickets, thereby sustaining the downward pressure on ticket prices.

The other options do not as effectively support the continued decline:

(A) discusses eating out, which is unrelated to movie tickets and does not address the root cause of consumer spending cuts.

(B) suggests that transportation costs will decrease, which would alleviate the pressure on steel prices and consumer spending, potentially reducing the need for further ticket price declines.

(C) focuses on the lack of blockbuster movies, which may affect demand but is external to the economic chain described and less directly tied to consumer financial pressure.

(E) merely reiterates information already presented in the passage and does not indicate a worsening trend that would drive future price declines.

Thus, (D) strengthens the causal link between iron ore supply and movie ticket prices, supporting the assertion that prices will continue to fall.

Answer: (D)

RudrakshaHere · Answer

The direction of thought provided by the passage is that rising transportation prices of iron ore will lead to reducing movie ticket prices. Thus if movie ticket prices are expected to fall further, then the only reason is that transportation costs will continue to rise.  Option D  is the only one that captures this thought.

Dereno · Answer

The question says that Marco city has a supply of iron ore, which is an important ingredient of steel making. The iron ore supply has been steadily declining. And now, the city is seeking other sources of iron ore to compensate the declining iron ore supply.

And, these new sources are at a greater distance, and this has an impact on the transportation cost. As the transportation cost increased, the retail price of the utensils increased. This increase in MRP, has dented the spending capacity of the citizens of Marco city.

The citizens of Marco city, in order to purchase the utensils, have cut the Non- Essential Expenditure (NEE) like purchase of movie tickets.

As a cyclical effect, the theatre owners in-order to boost the sale of movie tickets, have reduced the price of the tickets.

We need to find the statement - which most support for the assertion that the prices of movie tickets in Marco city will continue to decline in future?

let’s look into the options

(A) The people of Marco city will not be willing to cut down their expenditure on eating out.

Option A is wrong , because if the citizens are not cutting their expenses of eating outside, then the disposable income available in hand reduces further. This can either decrease the movie ticket or cannot decrease the movie ticket . Hence wrong.

(B) After the inauguration of the Goldport Bridge, expected to happen very soon, the transportation costs to Marco city will be halved.

Since, the question follows a chain reaction. The decrease in transportation costs, doesn’t necessarily mean the MRP of utensils is reduced. The price can remain stagnant too. This effect may or may not affect the price of movie tickets. Hence, an uncertainty prevails when this event occurs. Hence, wrong.

(C) There are no blockbuster movies with stellar star casts lined up for release anytime soon.

This is an irrelevant option. Hence, Wrong.

(D) The supply of iron ore to Marco city is expected to go down even more in the near future.

If the supply of iron ore drops further, then the transportation cost might increase as we need to increase the new supplies. The increased transportation cost, increases the MRP of utensils. The disposable income in the hands of the citizens reduces further. So, spending on NEE decreases, eventually culminating to the decrease in the price of the movie tickets. If the theatre owners want the people to come to the shows.

It is good to ignore the laws of supply demand and other factors of economy, and focus on the question stem alone in isolation.

(E) Residents of Marco city view movie tickets as non-essential items of expenditure.

Already the residents view the movie tickets as NEE, as this doesn’t change the scenario’s status quo anymore. This doesn’t impact the price of the movie tickets in any way. Hence, wrong.

Option D .

Bunuel · Answer

Official Explanation

Answer: D

This argument consists of a series of cause and effects, wherein the effect of one event becomes the cause of another event. The last item in this chain is the reduction of movie ticket prices by movie theatres in Marco City. So, one entire chain of cause and effect has ended with movie theatres lowering their ticket prices. Now, why will the movie theatres lower their ticket prices even further? Only if the cycle of cause and effect were to start all over again and continue on and on. Since the cycle starts with the decline in supply of iron ore to Marco city, for the cycle to continue the supply of iron ore has to keep on decreasing in future as well. D states this and is the correct answer.

(A) Unless we are told whether the expenditure on eating out is essential or non-essential expenditure, this point will be irrelevant to the argument.

(B) This should actually weaken the argument by suggesting that the impact of reduced iron ore supply could be absorbed by the reduction in transport cost.

(C) The presence of blockbuster movies is outside the scope of the argument.

(D) The correct answer.

(E) Even if this is so, the movie ticket prices should stabilize at their new low prices. Why should they go down further?

The supply of iron ore, the most important component in steelmaking

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The supply of iron ore, the most important component in steelmaking

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

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From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

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