A library currently has only coin-operated photocopy machines which

Question

A library currently has only coin-operated photocopy machines, which cost 10 cents per copy. Library administrators are planning to refit most of those machines with card readers. The library will sell prepaid copy cards that allow users to make 50 copies at 9 cents per copy. Administrators believe that, despite the convenience of copy cards and their lower per-copy cost, the number of copies made in the library will be essentially unchanged after the refit.

On the assumption that administrators' assessment is correct, which of the following predictions about the effect of the refit is most strongly supported by the information given?

A. Library patrons will only purchase a copy card on days when they need to make 50 or more copies.

B. No library patrons will increase their usage of the library's photocopy machines once the refit has been made.

C. If most of the copy cards sold in the library are used to their full capacity, the number of people using the library's photocopy machines over a given period will fall.

D. Revenues from photocopying will decrease unless most library patrons choose to use the remaining coin-operated machines in preference to the card-reader equipped ones.

E. Revenues from photocopying will increase if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity.

ID: 500273
CR62740.02

KarishmaB · Accepted Answer

Here is a video explanation of this problem:  
 https://youtu.be/6ldOMpyHLUw

Current:  
Coin operated machines costing 10c per print. So for 50 prints, cost will be 500c

New  :
Most machines will be PREPAID card operated costing 9c per print for 50 prints. So people will prepay 450c to buy a card for 50 prints.
Some old machines will be retained.

Number of copies made will stay the same.

What can we infer? Since number of copies made is staying the same, and cost per copy is reducing by 10%, we can expect a reduction in revenue until and unless EVERYONE uses only the old machines. Then the revenue will stay the same.
Let's look at the options:

A) Library patrons will only purchase a copy card on days when they need to make 50 or more copies.

We cannot infer this. Even if they want to make 48 copies, they should still buy the card because it will be cheaper. Anyway, what the patrons will do, we cannot say.

B) No library patrons will increase their usage of the library's photocopy machines once the refit has been made.

Not necessary. We know that total number of copies will be the same. Some patrons may make more, others may make less.

C) If most of the copy cards sold in the library are used to their full capacity, the number of people using the library's photocopy machines over a given period will fall.

No reason why number of people using machines will fall.

D) Revenues from photocopying will decrease unless most library patrons choose to use the remaining coin-operated machines in preference to the card-reader equipped ones.

'Most' is not good enough. 'All' can be inferred. All need to use coin machines to keep the revenue steady.

E) Revenues from photocopying will increase if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity.

Here is a new angle we had not considered before. What if people purchase copy cards but not use them fully. Their capacity is 50 copies so less than 90% of their capacity is less than 45 copies.
People have already paid 450c for the cards. But if they make less than 45 copies, they are actually paying more than 10c per copy. Then, since number of copies will stay the same, the revenue for the library will increase.
Correct

Answer (E)

itspC · Answer

TARGET: Prediction from info.>>> Inference (draw a conclusion) Prethinking:If no. of copies unchanged then what happnens

? I have many thoughts on this. Lets jump to options as too much thinking is BAD and a BIG NO NO on GMAT.

A) How can we infer this ? No way B) No one will increase usage ? who knows if someone increases and someone decreases(or wt ever) Can't infer this. C) Copy cards and number of people can't be related unless we know whats the total count of copies and their relation. D)Revenue decreases unless most patrons use coin machines >>> This isn't itself wrong but word most is extreme . What if a few of them used coin machines.,.ie., >>> few = enough to cover the difference between revenues ?? This can't just be a valid conclusion in this case. SO incorrect E) Ok lets bring in some math here:if coins used 100% (50 copies)=>500 cents >>> if 100% card used (50 copies)=>450 cents--->Loss of 50 If card used less than 90%(<45 copies)== (<405 cents used) +45CENTS (stay unused) ===>>> 450 cents for less than 45 copies which brings revenue to greater than 10 cents per copy . Therefore, Our ANSWER is:E Though this math is lengthy. I just wrote it for your understanding. On exam day just do this calculation or estimation in mind. But NEVER GUESS without proper reasoning. Don't correct my grammar it's not SC

. I m being concise.

Hope this helps. Thanks for likes

yatindra20 · Answer

VeritasPrepHailey  
I got to learn a lot from your notes specially the ones which you write at the end, on why people get this question wrong.
Could you please help me with your analysis, and how do you approach the question.

I was confused between B and D and rejected E as it didnt sound me convincing. and landed up with D as Administrators believe that no of photocopes will not increase so everyone buying the copy cards will use their cards for first copies at cheaper rate and as a result revenues should drop as (No of pages remains same X cost per page reduced )

HaileyCusimano · Answer

Hi yatindra20 ! I must have missed this tag - apologies! Anyhow, feel free to take a look at VeritasKarishma 's explanation above and follow up with any questions

AntrikshR · Answer

Hello  VeritasKarishma  Ma'am,

Thank you for posting the detailed explanation of this questions. It helped me alot in understanding the basics of this question.
I have a silly doubt regarding option E.
We are assuming here that the cents un-utilized in the card is going as extra revenue to the library. (Unless the un-utilized money goes back to the library every month)
However, cents can be used at later point in time right!
So if I deconstruct the statement given in E "Revenues from photocopying will increase if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity.". It means if copy cards were used for SIGNIFICANTLY less than 90 % (45 copies) copies then profit of the library will increase.

Using card: If a person is photocopying 10 copies (significantly less than 45) in a particular month=> his expenditure will be 90c, so he/she has 360c in his/her card. The remaining amount is still in the card which he/she can use later point in time. So how can we consider the unused amount of the card as profit earned by the library?
Using old machine: If the same person is photocopying 10 copies, he/she will pay 100c.
So overall, library is losing money.
Please help me understand if there is a gap in my understanding.

KarishmaB · Answer

It is a PRE PAID card so the user has already paid 450c. Option (E) says 
"... Revenues from photocopying will increase if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity."

It says clearly that the cards are used to less than 90% of their capacity. It means the rest of the % is not used (not next month, not ever).

Anant87 · Answer

VeritasKarishma

I had a fundamental doubt regarding this question - If the number of copies DONOT change & the cards are PREPAID then the new revenue is fixed (it cant change either!)

If the number of copies previously were 500 then the revenue would have been 5000. If we assume the same number of copies this year (500) then the revenue would be 9*500 = 4500. Now if we consider option (E) - that each card is under-utilized significantly - then the "revenue per copy" can increase but NOT the actual revenue - as the actual revenue has already been garnered.

KarishmaB · Answer

Anant87 :

This is a case of pre-paid advantage to the organisation.

Today: 
500 copies are printed at 10 cents per copy so revenue = 5000c

Tomorrow  (after refitting)
Each prepaid card is for 450c (50 copies at 9c a piece).
There are 3 different scenarios possible.

10 prepaid cards (500 copies possible) are sold for 4500c
All 500 copies are printed. 
Revenue reduces.

11 prepaid cards (550 copies possible) are sold for about 5000c
500 copies are printed (about 90% of capacity of cards)
Revenue is same.

15 prepaid card (750 copies possible) are sold for 6750c
Only 500 copies are made (not 750 copies because cards used to significantly less than 90% of their capacity)
Revenue increases.

sonalgmat123 · Answer

I have one query ..

How can the card operated machines can go underutilised when the number of copies made remains the same .. Are we also assuming that the some of the coin-operated machines will be overutilised i.e will make more than 50 copies / machines ?

unraveled · Answer

VeritasKarishma   AndrewN  
My question is in extension to  sonalgmat123  's question.

I understand the passage as follows:
Whatever mentioned in the passage, it is true. Whatever the question stem says is true, even if what it asks for is conditional.
I note that E is a conditional so it anticipates future revenue based on some logic - words like 'will' and 'if' helps in figuring out that. 
E basically, eliminates the fact that the number of copies will remain essentially unchanged i.e. it will change and if the number change(DECREASE  significantly ) then revenue will increase.

So, can we say that 'On the assumption that administrators' assessment is correct' means just it is true? Can a conditional change the correct assessment which is true? 
Because if it cannot then E does not make sense.
Please help.!!

AndrewN · Answer

Hello,  unraveled . As you said, the logic of the passage, the premises, must hold, even if a conclusion is wayward. In this case, we can justify the conditional in (E)  on the basis  that the information from the passage holds. The tip-off to me really came with the strong qualifying language:  significantly . I wrote about that very word in response to an equally difficult CR question in  this post . As an alternative approach, you can look to pare down the answer choices one by one to arrive at the correct conclusion. (I initially misread (B), overlooking the absolute in  no , and it cost me some extra time to work out the question—2:48, to be exact.)

I hope that helps. If you have further questions, I would happy to offer my thoughts. Thank you for thinking to ask me.

- Andrew

Vegita · Answer

Hey VeritasKarishma Most of the discussions on this thread are about option E. However, could you expand a bit more on option D, which comes close to being the correct answer? most - greater than 50% (51% - 100% inclusive). Knowing this, it was hard to eliminate option D. Unrelated question. Should we expect this kind of question, if we are not aiming for V 42+? This CR passage looks like something that one would get if he/she is doing really well on the Verbal section.

Fdambro294 · Answer

Oh man this one kicked me hard......

It took me a couple of minutes to understand why E was correct. I too was thrown for a loop by the last sentence: “the number of copies will be essentially unchanged.”

I’ll TRY to explain my reasoning without resorting to lots of numbers, although in any question such as this we should be thinking about numerical comparisons.

How could the revenue go up? The cards are cheaper on a per copy basis and “the number of copies will remain unchanged.”

Less money on a per copy basis, same total copies ———-> revenue should go down, shouldn’t it? Click D, wrong.

Let’s build a small world and say Larry, Moe, and Curly are the only customers and would each make a set number of copies: 50, 50, and 50

They used to pay each time for their copies. The library got its 10 cents per copy and made 1,500 cents. 150 total copies were made.

The new plan is to sell cards with 50 copies on them at a cost of 9 cents per copy. Larry, Moe and Curly each buy a card: what a great deal!

The key is that these cards are pre-paid, meaning they pay for all 50 copies up front at 9 cents per copy.

The sentence that is causing the most confusion (at least for me at first) is the line that states “the number of copies are unchanged.” This is the same sentence that makes it so E is supported by the facts.

“Revenues on photocopies will increase if copy cards that are purchased are, on average, used to significantly less than their capacity.”

In our world where Larry, Moe, and Curly were the only 3 customers who bought cards, this would lead to a problem. IF the copy cards are only used to 80% (we’re told “significantly” less than 90%), then this means our 3 guys made copies of:

40, 40, and 40. 120 copies.

But before they made 150 copies. “The copies remain essentially unchanged.”

Thus, the only way to keep the copies the same is to sell MORE of these cards to more customers. We need at least a 4th person to come in and buy a card. So another customer (Bob Marley) must have come in, pre purchased a card, and used some of it.

Bob used 30 copies.

Now the copies have remain unchanged: we have the same 150 copies as before.

Before:

Larry, Moe, Curly: 150 copies ———-> 1,500 cents

Now:
Larry, Moe, Curly, and Bob: still make the 150 copies ———-> but they have all prepaid for a card: 9 cents per copy * 50 copies = 450 cents per card

The library has now made 450 cents off each one of them for ———-> 1,800 cents

And 1,800 cents > 1,500 cents

Each copy essentially only costs 9 cents. The key is that the cards are prepaid and customers are not using them to their potential.....while the total copies stay the same. More money up front for the big, bad corporate library.....what’s up with these libraries always trying to take money out our pocket?

Therefore, based on answer E’s “IF” hypothetical about the usage and the facts given, the revenue MUST go up. The cards are prepaid and on average the customers aren’t fully using them.

Is it me or does this test get harder with each passing Official Guide?

Thanks generis

Of course you were the one to post it

Edit: and before everyone comes up with scenarios to prove how this COULD be false, notice the question stem: “Best supported.”

The question stem is slightly different from a pure inference question stem in which we need to make a 100%, without a doubt, locked in with certainty Inference. (Called deductions?)

E is very strongly supported - right under that 100% Inference level.

Posted from my mobile device

Edit: and before everyone comes up with scenarios to prove how this COULD be false, notice the question stem: “Best supported.” The question stem is slightly different from a pure inference question stem in which we need to make a 100%, without a doubt, locked in with certainty Inference. (Called deductions?) E is very strongly supported - right under that 100% Inference level. Posted from my mobile device

KarishmaB · Answer

D) Revenues from photocopying will decrease unless most library patrons choose to use the remaining coin-operated machines in preference to the card-reader equipped ones.

In other words, (D) is saying that revenues will not decrease if most patrons choose to use old machines.

If "most" patrons choose to use old machines, but even 1 patron chooses to use the new machine, the revenue will decrease. Only if ALL patrons use the old machines, we can say that the revenue will not decrease.

Hence (D) is not supported by the argument.

... and yes, it is a tricky question. Evaluate it properly to improve your understanding of logic concepts.

Quantum2022 · Answer

Shouldn't answer 'E' say revenue PER COPY will increase? The way it's written now, how can we infer total revenue will increase even if significantly less than 90% of the card's capacity is used? For example is someone printed only 10 copies but paid 450 cents for the card, the revenue per copy will be 45 cents which is clearly more than 10 cents. Where is my thinking off?

Posted from my mobile device

Posted from my mobile device

GraceSCKao · Answer

As a person who needs to read companies' financial reports from time to time, I do not like the option (E) at all because I think that the time frame for "revenues" is unclear and also because I think that the option (E) might be valid only if there is an extra assumption that generally these pre-paid cards whose usage rates are significantly less than 90 percent on average will never be used again. I am not sure whether the wording in the option (E) has already expressed the idea itself.

This extra assumption (or not, if the wording of (E) has conveyed this idea) is highly contradictory to my common sense--at college, yes not every student uses his or her prepaid card to the full capacity, but most students who use "significantly" less than 90 percent of the capacity, or 50 percent for example, will remember to continue using the card in the next semester or next year.

I am to give an example to show why I do not like the option (E). Accounting is not my expertise, so I am a bit curious how the members who are accountants think about (E), although the professional knowledge will not be required for GMAT.

Let's say year 1 and year 2. In the year 1, the library finished the refit and sold the pre-paid cards. As we are told by the stimulus that the number of copies made in the library will be essentially unchanged and we know from the option (E) that the cards are used less than 90 percent of their capacity, we can infer that the overall combined copy capacity of all sold pre-paid cards must surpass the number of copies that were really made in the year 1.

For example, there are 10 customers who need to do 1,000 copies in total every year. We cannot infer how many of them would change to use the pre-paid cards or whether some of them would buy the cards together to share to save money. But from the information of the option (E) "if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity," we can be sure that we are dealing with a scenario in which at least two pre-paid cards were sold, and their average usage rate is much lower than 90 percent.

Let's be conservative--say 9 customers who need to make 900 copies routinely per year still used the coin-operated machines after the refit. Revenue from these customers did not change at all. One customer who need to make 100 copies per year bought the prepaid cards. Since we know that these cards are not fully used, this customer must have bought more than 2 cards (50 copies per card, 100 copies for two cards). If the cards' average usage rate is 50 percent, this customer bought 4 cards (100/200=50 percent). (The lower the usage, more prepaid cards the customer has bought.) The library made revenue of 450*4=1,800 from this customer, and this revenue is higher than 10*100=1,000 the library would have earned from this customer if the refit had not been made.

So far, the option (E) holds, and I have no problem. But my biggest concern is: what about the year 2? I have difficulty believing that this customer would never use the copy cards again in the year 2--this is strongly against my common sense.

If this customer continues to use the pre-paid cards to make another 100 copies in the year 2, the library would make no revenue from her or him in that year. In the end, the library's total revenue from this client for the year 1 and year 2 would total 1,800, lower than 1,000*2=2,000 it could have made without the prepaid card system.

avigutman IanStewart GMATNinja
may I check with you--when (E) says Revenues from photocopying will increase if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity, does it exactly mean not only that the cards' average usage rate is significantly lower than 90 percent, but also that the rate would stand at this low level forever? In other words, I do not really need to care about "what if" for the future, right?

If this is the exact meaning from the option (E), I would understand why it is a correct option, though I do not think this scenario is that possible in the real world (at least in my world.)

Secondly, given that we are allowed to use common sense in the verbal section, may I ask what should I do if I find an option's information is likely against my common sense? This is an inference-type question and the stem does not say which option, if true..... I am aware that this part if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity is a condition in the option (E)--does it mean that I just need to take this condition as true (however I feel strange at it)?

Finally, may I ask how you approached this question and arrived at the option (E)? It is really a big and unexpected twist for me to see "increasing revenue" in (E) while the stimulus talks much about that cost/revenue per card is lower in the prepaid system.

I could see why the options (A), (B) and (C) are incorrect, and chose (D) for the first time in my practice. Thank to the explanations of KarishmaB, later I understood why the option (D) is wrong. I think I got a takeaway from this CR question: when four options have been ruled out, just select the remaining one and move on, however I dislike it.

Sorry that my query is a bit long.
Thank you and look forward to your insights.

The following are some posts that might relate to my query.

avigutman · Answer

We must take answer choice (E) at its word,  GraceSCKao , even if it seems unrealistic to us:  copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity.  That's it. There's no extra modifier at the end saying "in the year they were purchased" or something along those lines.

Yes!!!

I believed (E) when it claimed that the copy cards would be used to significantly less than 90 percent of their capacity. Given all the other provided info, it follows that the overall revenues (per any given timeframe) would increase.

YES!!!

We know that  the number of copies made in the library will be essentially unchanged after the refit .

The library earns the revenue at the point of purchase of a copy card, presumably. And, since  copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity , more and more copy cards get purchased!

I would argue that (E) is 100% supported.

The actual revenue  with  prepaid copy cards has to be compared to the actual revenue  without  prepaid copy cards. The former will definitely be greater than the latter, if we take (E) at its word.

GMATNinja · Answer

(E) explains what would happen "if copy cards that are purchased are, on average, used to significantly less than 90 percent of their capacity."

It doesn't specify a time period, or a number of visits to the library, or anything of that nature. So (E) does, indeed, mean that these cards (on average)  never  get near that 90 percent mark.

You don't have to make any assumptions to read it that way. On face value, (E) talks about what would happen if the cards are not well-utilized: revenues from printing would go up.

Is it  likely  that this situation would occur? Who knows! But we don't need to worry about how likely it is. From the info in the passage, we can infer that IF people suck at using up their cards, then revenue from printing would increase. So (E) is our winner.

I hope that helps!

Syavashp · Answer

There was some math involved in getting to the correct answer choice i.e. E. Is this common on hard level CR questions i.e. should we watch out for such details?

A library currently has only coin-operated photocopy machines which

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