Last visit was: 26 Apr 2024, 05:34 It is currently 26 Apr 2024, 05:34

Close
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Close
Request Expert Reply
Confirm Cancel
SORT BY:
Date
Tags:
Difficulty: Sub 505 Levelx   Strengthenx                           
Show Tags
Hide Tags
Director
Director
Joined: 28 Nov 2014
Posts: 754
Own Kudos [?]: 1264 [40]
Given Kudos: 86
Concentration: Strategy
GPA: 3.71
Send PM
Most Helpful Reply
Director
Director
Joined: 26 Oct 2016
Posts: 510
Own Kudos [?]: 3379 [13]
Given Kudos: 877
Location: United States
Concentration: Marketing, International Business
Schools: HBS '19
GMAT 1: 770 Q51 V44
GPA: 4
WE:Education (Education)
Send PM
General Discussion
Senior Manager
Senior Manager
Joined: 02 Dec 2014
Posts: 307
Own Kudos [?]: 300 [3]
Given Kudos: 353
Location: Russian Federation
Concentration: General Management, Economics
GMAT 1: 640 Q44 V33
WE:Sales (Telecommunications)
Send PM
Manager
Manager
Joined: 09 Sep 2013
Posts: 63
Own Kudos [?]: 14 [0]
Given Kudos: 9
Send PM
Re: Although Ackerburg’s subway system is currently operating at a deficit [#permalink]
The first thing we need to do is find the assumption.
How we find the assumption is by the looking at the three things:
1. There is no other way to achieve the conclusion.
2. the conclusion is possible
3.Relevance to the conclusion

Only Answer choice D falls in one of the 3. That is point 2. Only if 10 percent increase can be handled. It will be possible to increase the revenue.

Throughout the years that the subway system has operated, fares have never before been reduced. This does not even imply that okay now i decrease fare more people come more will be revenue.
B The planned fare reduction will not apply to students, who can already ride the subway for a reduced fare. - So? does the possibility of new people coming in increase.
C Next year, the transit authority will have to undertake several large-scale track maintenance projects. This says there will be loss.
D The subway system can accommodate a ten percent increase in ridership without increasing the number of trains it runs each day. Yea hold this option
E The current subway fares in Ackerburg are higher than subway fares in other cities in the region.- Other regions - No not interested
Manager
Manager
Joined: 12 Jul 2017
Posts: 199
Own Kudos [?]: 212 [0]
Given Kudos: 442
Location: India
Schools: ISB '21 (A)
GMAT 1: 570 Q43 V26
GMAT 2: 690 Q50 V32
GPA: 3.8
Send PM
Re: Although Ackerburg’s subway system is currently operating at a deficit [#permalink]
Putting it in the simplest way.

1) there has been deficit. Deficit = operating cost - revenue.

2) the proponents presume that if the number is increased by 10% the revenue will increase.

And they conclude that it will help reduce or offset the deficit next year.


As per the formula, what must be done so that the proponents are true ?

Next year operating costs should not increase in any way.


D leads us to that.

Posted from my mobile device
Intern
Intern
Joined: 16 Apr 2019
Posts: 14
Own Kudos [?]: 2 [0]
Given Kudos: 24
Location: India
GMAT 1: 690 Q42 V40
GPA: 3.9
WE:Web Development (Computer Software)
Send PM
Re: Although Ackerburg’s subway system is currently operating at a deficit [#permalink]
lthough Ackerburg’s subway system is currently operating at a deficit, the transit authority will lower subway fares next year. The authority projects that the lower fares will result in a ten percent increase in the number of subway riders. Since the additional income from the larger ridership will more than offset the decrease due to lower fares, the transit authority actually expects the fare reduction to reduce or eliminate the subway system’s operating deficit for next year.

Which of the following, if true, provides the most support for the transit authority’s expectation of reducing the subway system’s operating deficit?


A. Throughout the years that the subway system has operated, fares have never before been reduced. (Incorrect)

B. The planned fare reduction will not apply to students, who can already ride the subway for a reduced fare. (Incorrect)

C. Next year, the transit authority will have to undertake several large-scale track maintenance projects. (Incorrect)

D. The subway system can accommodate a ten percent increase in ridership without increasing the number of trains it runs each day. (correct)

E. The current subway fares in Ackerburg are higher than subway fares in other cities in the region.
Manager
Manager
Joined: 17 Aug 2021
Posts: 164
Own Kudos [?]: 92 [0]
Given Kudos: 168
Location: India
WE:Corporate Finance (Accounting)
Send PM
Re: Although Ackerburgs subway system is currently operating at a deficit [#permalink]
Quote:
Although Ackerburg’s subway system is currently operating at a deficit, the transit authority will lower subway fares next year. The authority projects that the lower fares will result in a ten percent increase in the number of subway riders. Since the additional income from the larger ridership will more than offset the decrease due to lower fares, the transit authority actually expects the fare reduction to reduce or eliminate the subway system’s operating deficit for next year.

Which of the following, if true, provides the most support for the transit authority’s expectation of reducing the subway system’s operating deficit?


A. Throughout the years that the subway system has operated, fares have never before been reduced.

B. The planned fare reduction will not apply to students, who can already ride the subway for a reduced fare.

C. Next year, the transit authority will have to undertake several large-scale track maintenance projects.

D. The subway system can accommodate a ten percent increase in ridership without increasing the number of trains it runs each day.

E. The current subway fares in Ackerburg are higher than subway fares in other cities in the region.


Hello ParamjitDasGMAT ,

I want your views on my reasoning -

Given,
Lowering Fare -------->Increase in number of rides ------> Additional Income------->reduce / eliminate the operating deficit.

Here the question stem talks about Income but fails to give us information about Expenditure .
What if Expenditure will increase. Then in that case the Additional Income wont be sufficient to reduce/ eliminate the Deficit

Option D bridges this gap , and hence the strenghthener.

Quote:
Surplus/Deficit = Total Income - Total Expenditure


Thanks
User avatar
Non-Human User
Joined: 01 Oct 2013
Posts: 17226
Own Kudos [?]: 848 [0]
Given Kudos: 0
Send PM
Re: Although Ackerburgs subway system is currently operating at a deficit [#permalink]
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
GMAT Club Bot
Re: Although Ackerburgs subway system is currently operating at a deficit [#permalink]
Moderators:
GMAT Club Verbal Expert
6921 posts
GMAT Club Verbal Expert
238 posts
CR Forum Moderator
832 posts

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne