Nice question. I picked D and got it wrong. But after review, C is the best.
This is resolve the paradox, so we don't have conclusion here, just fact.
Fac1: 20 years ago, there was a regulations requiring operators to pay for the reclamation.
Fac 2: Reclamation technology has not improve
Fac 3: But the AVERAGE reclamation cost today is 1/2 compared to that of 20 years ago.
Why:
Key word here is AVERAGE reclamation cost (ARC). ARC is calculated from reclamation cost in Balzania, and reclamation costs from other areas. ARC will reduce, if operators move from high cost areas to lower cost areas. It means operators moved out Balzania to areas that have lower reclamation cost. That is C.
anish123ster
B is out because it talks about the reduction of quantity (Q), but average cost couldn't decrease if cost/ton - Price (P) - did not decrease.
To be more clear, let try the equation.
Average cost = [Q1xP1 + Q2xP2 + ...........+ QnxPn] / [Q1 + Q2 +.....+ Qn]Q1 = quantity in area 1; P1 = reclamation cost/ton in area 1
Q2 = quantity in area 2; P2 = reclamation cost/ton in area 2
B says [Q1 + Q2 +.....+ Qn] reduced, it means only the denominator decreased, but it doesn't say the numerator also decreased.
What if Q decreased, but P increased! Average cost will not decrease.
I hope it helps.
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