cumulonimbus wrote:
Tony: A new kind of videocassette has just been developed. It lasts for only half as many viewings as the old kind does but costs a third as much. Therefore, video rental stores would find it significantly more economical to purchase and stock movies recorded on the new kind of videocassette than on the old kind.
Anna: But the videocassette itself only accounts for 5 percent of the price a video rental store pays to buy a copy of a movie on video; most of the price consists of royalties the store pays to the studio that produced the movie. So the price that video rental stores pay per copy would decrease by considerably less than 5 percent, and royalties would have to be paid on additional copies.
Which one of the following, if true, would contribute most to a defense of Tony’s position against Anna’s reply?
(A) The price that video rental stores pay for movies recorded on videocassettes is considerably less than the retail price of those movies.
(B) A significant proportion of the movies on videocassette purchased by video rental stores are bought as replacements for worn-out copies of movies the stores already have in stock.
(C) The royalty fee included in the price that video rental stores pay for movies on the new kind of videocassette will be half that included in the price of movies on the old kind.
(D) Given a choice, customers are more likely to buy a movie on videocassette than to rent it if the rental fee is more than half of the purchase price.
(E) Many of the movies rented from video rental stores, particularly children’s movies, average several viewings per rental fee.
ANALYZE THE STIMULUS:Tony: A new videocassette lasts for only 1/2 as many viewings as the old kind does but costs 1/3 as much. Video rental stores would find it significantly more economical.
Anna: the videocassette itself only accounts for 5 percent of the price, most of the price consists of royalties the store pays to the studio. Thus, the price that video rental stores pay per copy would decrease by considerably less than 5 percent, and royalties would have to be paid on additional copies
Pre-thinking: The royalties should be paid for each film, not for how many videocassette used to record a film. If the film is divided into 2 videocassettes, the corresponding royalties should be divided too. ANALYZE EACH ANSWER: (A) The price that video rental stores pay for movies recorded on videocassettes is considerably less than the retail price of those movies.
Wrong. The fact that how much studios sell “those movies” is out of scope. The main point is “royalties” - the rental fee - the store pays to the studio that produced the movie.
(B) A significant proportion of the movies on videocassette purchased by video rental stores are bought as replacements for worn-out copies of movies the stores already have in stock.
Wrong. If the royalties does not correspond to the divided length of new videocassette ==> More videocassettes, more royalties ==> Clearly, B does not help Toni.
(C) The royalty fee included in the price that video rental stores pay for movies on the new kind of videocassette will be half that included in the price of movies on the old kind.
Correct. C clearly states that the royalties should be paid for each film. It doesn’t matter how many videocassette used to record a film, e.g., if the film is divided into 2 videocassettes, the corresponding royalties should be divided too. Therefore, if a video rental store can save videocassette costs, that would be definitely economical. (D) Given a choice, customers are more likely to buy a movie on videocassette than to rent it if the rental fee is more than half of the purchase price.
Wrong. The fact that “customers are more likely to buy a moive” is totally out of scope.
(E) Many of the movies rented from video rental stores, particularly children’s movies, average several viewings per rental fee.
Wrong. Nothing about specific categories such as children’s movies. Thus, E is wrong.
Hope it helps.
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Updated on: 06 Feb 2024, 00:22
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(02:46)
wrong 
