This one flummoxed me Gasoline stations on the New York side

Question

This one flummoxed me

Gasoline stations on the New York side of the New York/New Jersey border have lost more than a third of the business they previously enjoyed from New Jersey drivers. Gas companies allege that the extreme drop resulted from a rise in the New York's taxes on gas that drove gas prices up by 40%.

Which of the following offers the best prospect for alleviating the problem as the gas companies define it?

A. Petition the New York state government to lower public transportation rates for all interstate riders and subsequently receive government subsidies to offset the loss in business.
----> the government rises taxes on gas in order to generate more revenue ---> petition in order to ask the gov to give subsidies is impractical coz then the gov has to use its revenue ---> A out.

B. Increase the cost of New York gas to New York residents to make up for the cash loss.
-----> what if the Yankee drivers reduce their gas consumption due to higher price as well? --> out

C. Agressively promote an enviornmentally friendlier biofuel alternative which can be charged at at least 40% higher pump prices.
-----> people are driven by money , not by environmental consideration so this suggestion seems impractical. -->out

D. Allow New Jersey drivers to buy gas in New York at New Jersey pump prices.
----> most practical!

E. Offer a free cup of Starbucks coffee with every 40 liter fill up.
------> what's if most of the drivers dislike coffee like i do?! :roll:

D stands.

sangarelli · Answer

Should be (D).

kripalkavi · Answer

One more for D.

faifai0714 · Answer

E sounds ridiculous but I am gonna take a risk here to choose E. Since the gas station previously enjoyed their profits from New Jersey drivers, that could mean New Jersey's tax on gas is also increasing. Having the same price with the NJ gas doesn't solve the problem. But having a starbucks coffee, both people from New York and New Jersey can benefit the price of a coffee.A, B and C are making the problems worse.

Juaz · Answer

Going for D. . Starbucks coffee :shock:

SimaQ · Answer

I choose D also.... Of course this choice does have weakneses, but it is the best among other choices...

The goal is to bring back New Jersey drivers..... 
A would not solve the problem at all, the stations would have even bigger losses, but those additional losses will be covered by the government. 

B would multiply the problem, as New York residents would stop buying fuel aswell.... 

C and E are out of scope..

faifai0714 · Answer

you know I find that answer really funny lol but who knows...

laxieqv · Answer

Gasoline stations on the New York side of the New York/New Jersey border have lost more than a third of the business they previously enjoyed from New Jersey drivers. Gas companies allege that the extreme drop resulted from a rise in the New York's taxes on gas that drove gas prices up by 40%.

Which of the following offers the best prospect for alleviating the problem as the gas companies define it?

A. Petition the New York state government to lower public transportation rates for all interstate riders and subsequently receive government subsidies to offset the loss in business.
----> the government rises taxes on gas in order to generate more revenue ---> petition in order to ask the gov to give subsidies is impractical coz then the gov has to use its revenue ---> A out.

B. Increase the cost of New York gas to New York residents to make up for the cash loss.
-----> what if the Yankee drivers reduce their gas consumption due to higher price as well? --> out

C. Agressively promote an enviornmentally friendlier biofuel alternative which can be charged at at least 40% higher pump prices.
-----> people are driven by money , not by environmental consideration so this suggestion seems impractical. -->out

D. Allow New Jersey drivers to buy gas in New York at New Jersey pump prices.
----> most practical!

E. Offer a free cup of Starbucks coffee with every 40 liter fill up.
------> what's if most of the drivers dislike coffee like i do?! :roll:

D stands.

ak_idc · Answer

D seems the answer. But imagine New York state allowing only drivers from New Jersey to have that benefit. Don't you think drivers from other regions ask for the same sort of benefit? Can the New York government offer that to them also?

A comes dangerously close. Though it seems less practical, and time taking, it is more justified. Giving concession to all interstate riders, might make them use the service in New York state, and that way they might contribute more tax to the government. It is based on the same logic as selling more items with less margins, to get higher overall proft or revenue.

ugo_castelo · Answer

D 2

SimaQ · Answer

Actually the benefit of A is = 0... People ride more public transportation buy less gas, the stations receive even larger losses, however those additional losses are compensated... end result, the petrol stations still suffer from the fact that new Jersey drivers do not buy gas in New york...

Concerning your doubts about D.... does that matter wether New York can offer the same deal to other states?

laxieqv · Answer

Again, you offered me a good business lesson ...thank you!!

Uhm, I re-read it ....yes, A comes very close as well ....I forgot that the federal government is seperated from state government (in fact, they're kinda independent entities ....especially in the bureaucratic system in US as i still recall from the lesson in the course " Governmental system in the West" :roll:

) Hik, but do we really have to take into consideration much biz knowledge in a CR?!! ...As we know GMAT tests the gist of reasoning rather than our professional knowledge

GMATT73 · Answer

You raise a valid argument Laxie. In D though, how could gas stations throughout the entire state of NY possibly check the state identity of every customer and then proceed to calculate and charge them a separate fee? 

This one is between A and D. Any other comments?

laxieqv · Answer

I also thought of what you raised as a point against D ...So what's the OA?!!

..I find that many CRs posted recently are not to test the gist of reasoning ...is this the new trend?

GMATT73 · Answer

I chose A, but the OA is (D). Even so, I am still unconvinced.

How is that a practical solution to the issue at hand? It not only increases the per customer transaction time, but also gives local "Yankees" an incentive to register their vehicles in NJ. Not a difficult thing to do if you know somebody with a valid address across the state line. 40% off three bucks a gallon adds up... Sorry, no OE available.

tennis1ball · Answer

D 2

This one flummoxed me Gasoline stations on the New York side

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