In 1984, network television commercials accounted for 80% of

Question

In 1984, network television commercials accounted for 80% of all network and non-network television advertising revenue. In 2004, that figure was 60%. During that same period, operating cost for the networks remained steady, and in 2004 every major network announced record setting profits.

The information above, if true, supports which of the following conclusions?

A) Between 1984 and 2004, the number of homes with access to non-network television channels increased by more than 20%. 
B) Teenagers comprise a growing proportion of television viewers, and teenagers prefer to watch non-network television shows. 
C) The amount of advertising revenue earned from non-network television commercials in 2004 was greater than the amount of revenue earned by network television commercials in 1984. 
D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials. 
E) Soon revenue from non-network television commercials will surpass revenue from network television commercials.

pqhai · Accepted Answer

Hello vad3tha.

Here is my 2 cents. Hope it helps.

ANALYZE THE STIMULUS:  
Fact 1: In 1984, network television commercials accounted for  80%  of all network and non-network television advertising revenue. 
Fact 2: In 2004, that figure was  60% . 
Fact 3: During that same period, operating  cost for the networks remained steady , 
Fact 4: In 2004 every major network announced  record setting profits .

Question: The information above, if true, supports which of the following  conclusions ?

Pre-thinking:   
- From fact 3:  Costs remained;  
- From fact 4: In 2004, Network TV had profits -->  REVENUE - COST >= 0 -->  Revenue must be equal or greater than that in 1984 .  KEY.   We don’t have to assume revenues will be equal or greater, this is the hidden fact. 
- Clearly, revenue of Network TV increased (or stayed the same) but its percentage decreased compared to Non-network TV. Thus, non-network TV must grow at faster rate than network TV in terms of revenue.

ANALYZE EACH OPTION:

A) Between 1984 and 2004, the number of homes with access to non-network television channels increased by more than 20%. 
 Wrong.  We can’t infer “20%”.

B) Teenagers comprise a growing proportion of television viewers, and teenagers prefer to watch non-network television shows. 
 Wrong.  Teenagers are only a sub-group. It can't represent for the whole group.

C) The amount of advertising revenue earned from non-network television commercials in 2004 was greater than the amount of revenue earned by network television commercials in 1984. 
 Wrong.   NOTE: we can’t convert from percentage to absolute value.  This is a popular trap in GMAT. Larger percentage does not mean larger absolute value and vice versa.

D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials. 
  Correct.    KEY is revenue of network TV increased but its percentage decrease, thus it must grow at slower rate than non-network TV did.

E) Soon revenue from non-network television commercials will surpass revenue from network television commercials.
 Wrong.  Can’t infer that.

Hope it helps.

AmoyV · Answer

In 1984, network television commercials accounted for 80% of all network and non-network television advertising revenue. In 2004, that figure was 60%. During that same period, operating cost for the networks remained steady, and in 2004 every major network announced record setting profits.

The information above, if true, supports which of the following conclusions? 
 The paradox can happen if the total revenues have increased so as to offset the lower revenue shares of the network television.

A) Between 1984 and 2004, the number of homes with access to non-network television channels increased by more than 20%.  Argument never says anything about the audience of network and non-network television. It could be home, office or anything in the world. OFS 
B) Teenagers comprise a growing proportion of television viewers, and teenagers prefer to watch non-network television shows.  OFS. Not concerned about end users. 
C) The amount of advertising revenue earned from non-network television commercials in 2004 was greater than the amount of revenue earned by network television commercials in 1984.  We cannot say that for sure. This *could* be true if the market of network and non-network television commercials grew exponontially. But this option is a *could be true* answer 
D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials.  Yes. The revenue share of network television dropped from 80% to 60% and the revenue share of non-network commercials grew from 20% to 40%. Assuming the total revenues grew(a very possible scenario), the non-network revenues would have grown at a faster rate than network revenues to create this difference in share. 
E) Soon revenue from non-network television commercials will surpass revenue from network television commercials. We can't really come to this conclusion from what is given in the argument.

JarvisR · Answer

In 1984, network television commercials accounted for 80% of all network and non-network television advertising revenue. 
In 2004, that figure was 60%. During that same period, operating cost for the networks remained steady, and in 2004 every major network announced record setting profits.

1) 84' :Total Revenue(X) = 80% of Total R (N) + 20% of Total R (NN)
 04' :Total Revenue(X') = 60% of Total R (N) + 40% Total R (NN)

2) operating cost for the networks remained steady
4) 2004 every major network announced record setting profits.
 
The information above, if true, supports which of the following conclusions?

C Vs D: 
I would go by POE here.

C) The amount of advertising revenue earned from non-network television commercials in 2004 was greater than the amount of revenue earned by network television commercials in 1984. 
.4X' >.8X => X' > 2X. Can v prove this from information given in premise. No.
 Note: Higher % doesn't mean higher val and vice versa.

D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials.
>> Here arg mentions abt the rate and not actual/absolute value. So i will go with this option.

abrakadabra21 · Answer

In 1984, network television commercials accounted for 80% of all network and non-network television advertising revenue. In 2004, that figure was 60%. During that same period, operating cost for the networks remained steady, and in 2004 every major network announced record setting profits.

1984 2006
NAR 80a 60b
NNAR 20 a 40b
------------------------------------
 100a 100b

Profit in 1984 = 100a - operating cost

Profit in 2006 = 100b - operating cost

The information above, if true, supports which of the following conclusions?

A) Between 1984 and 2004,  the number of homes  with access to non-network television channels increased by more than 20%.

B)  Teenagers  comprise a growing proportion of television viewers, and  teenagers prefer to watch non-network television shows.

C)  The amount of advertising revenue  earned from non-network television commercials in 2004 was greater than the  amount of revenue  earned by network television commercials in 1984.

D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials. 
 
rate of growth of advertising revenue earned from non-network television = 40b-20a/20a
rate of growth of advertising revenue earned from network television = 60b-80a/80a

2b/a > 3/4(b/a) so correct. 
E) Soon revenue from non-network television commercials  will  surpass revenue from network television commercials.

viviolivia · Answer

84: Total Revenue(A) = 80% of Total R (N) + 20% of Total R (NN)
04 :Total Revenue(B) = 60% of Total R (N) + 40% Total R (NN)
as operating cost is the same and major network announced record-setting profits, so 
B > A, how could this be true ? ---> D
C can not get this conclusion base on the argument.

PhantomAY · Answer

Premise 1: in 1984, network television commercial revenue = 80% * (all network revenue + non-network revenue)
Premise 2: in 2004, network television commercial revenue = 60% * (all network revenue + non-network revenue)
Premise 3: operating costs remained steady
Premise 4: every major network announced record high profits

OK so generally speaking, the profits of major network were soaring while costs stay the same, which mean revenues went up as well. Given network revenue is at a lower portion in 2004 than 20 years ago, the revenue from non-network must increase much faster.

with above pre-thinking in mind, let's go through the answers

A) nothings tells us how much the access to non-network increased
B) "teenage" is a new information, which cannot be inferred from the argument
C) we didn't know how the actual amount of non-network revenue in 2004 compared to network revenue in 1984, other than the non-network revenue is growing faster (e.g. assuming in 1984, the network revenue is $8 million, while the non-network revenue is $2 million. In 2004, both scenarios hold given info from the argument: 1) $12 million network and $8 million non-network 2) $18 million for network and $12 million for non-network. In only one of the scenarios the non-network revenue in 2004 > the network revenue in 1984)
D) Correct, fit the pre-thinking
E) we don't about the future trend, and the argument provides no info to prove that

naveengmat15 · Answer

i am confused between C and D can anyone explain?

VerbalBot · Answer

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