To facilitate development of telephone service in a rural province

To facilitate development of telephone service in a rural province, the national government pays the provincial government a subsidy for each long-distance call going into the province. A corporation has offered to base a national long-distance telephone service in the province, allowing long-distance calls to be made without any charge to the callers, if the provincial government splits its subsidy with the corporation. The corporation argues that since all calls would be routed through the province, the provincial government would profit greatly from this arrangement.

The corporation's prediction about the effects its plan would have, if adopted, relies on which of the following assumptions?

The corporation's prediction is the following:

the provincial government would profit greatly from this arrangement

The reasoning for that prediction is that the national government pays the provincial government a subsidy for each long-distance call going into the province. So, by basing a national long-distance telephone service in the province and thus causing many long-distance calls to be routed into the province, the corporation will cause a large volume of subsidies to be paid to the provincial government.

The correct answer will be an assumption that the corporation has relied on in making the prediction.

A. Without the plan, all long-distance telephone service in the province would involve at least some charges to callers.

What this choice says seems plausible. However, we are not looking for a plausible statement. We are looking for an assumption on which the prediction relies, and the prediction could be correct even if this choice is not true.

After all, even if it is the case that, without the plan, SOME long-distance telephone service in the province would NOT involve at least some charges to callers, the plan of collecting the subsidies by routing calls into the province could still be profitable for the provincial government.

Eliminate.

B. The national government's subsidy would apply not only for calls made to phones in the province, but to at least some long-distance calls that are merely routed through the province.

Notice that the plan is the following:

A corporation has offered to base a national long-distance telephone service in the province .... The corporation argues that since all calls would be routed through the province, the corporation will cause a large volume of subsidies to be paid to the provincial government.

We see that the plan involves calls "routed through the province." So, for the plan to work, subsidies must be paid on calls routed through the province.

So, if this choice is not true and the national government's subsidy would apply ONLY for calls made to phones in the province, then arrangement will not be profitable for the provincial government.

Thus, this choice is assumption on which the prediction relies.

(I personally don't really like this CR question because I don't think the way it works is very logical. I mean this "correct" answer is basically the assumption that the corporation has not misunderstood what "pays the provincial government a subsidy for each long-distance call going into the province" means. Normally, a assumption in a CR question is a key part of the argument that is understood but not stated. In this case, the assumption is basically that the corporation is not clueless about what's going on. At the same time, this choice is the only one that works at all. So, this question is gettable.)

Keep.

C. The provincial government would be interested in splitting its subsidy with the corporation only if doing so would yield significant profits for the province.

The corporation is probably assuming what this choice says in coming up with the plan. However, we are not looking for something that is simply an assumption the corporation is making. We are looking for an assumption the prediction relies on, and the prediction does not rely on this choice.

After all, if this choice were not true, and the provincial government would be interested in splitting its subsidy with the corporation EVEN IF doing so would NOT yield significant profits for the province, the plan as outlined would still result in the predicted outcome that the provincial government would profit greatly.

The prediction is about what would occur if the corporation's plan were implemented, not about what the provincial government is "interested in" doing. The provincial government could be interested in doing something that would not be profitable, but that fact would not affect what the outcome of this particular plan would be.

Eliminate.

D. The national government's subsidy for any long-distance call into the province is calculated as a fixed percentage of the charge to the caller.

Notice that the corporation's plan is to allow long-distance calls to be made "without any charge to the callers."

Thus, if this choice were true, the plan would not work at all since a fixed percentage of no charge would be no subsidy.

Eliminate.

E. In order for the arrangement to be profitable for the province, the province must receive more from the increased subsidy than it pays the corporation.

This choice is tricky because it mentions an aspect of the plan. The plan does involve the province receiving more from the subsidy than it pays the corporation.

Notice, however, that the corporation's prediction could could be correct even if what this choice says is not true.

After all, if this choice were not true, and the arrangement would be profitable for the province even if the province DID NOT receive more from the increased subsidy than it pays the corporation, then the prediction that the provincial government would profit greatly from this arrangement would still be correct.

So, the prediction does not rely on this choice being true.

Eliminate.

The correct answer is (B).