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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
29% (02:27) correct
71%
(02:29)
wrong
based on 518
sessions
History
Date
Time
Result
Not Attempted Yet
Newspaper publishers earn their profits primarily from advertising revenue, and potential advertisers are more likely to advertise in newspapers with a wide circulation a large number of subscribers and other readers than with other newspapers. But the circulation of the newspaper that is currently the most profitable one in this city has steadily declined during the last two years, while the circulation of one of its competitors has steadily increased.
Any of the following, if true, would help explain the apparent discrepancy between the two statements above EXCEPT:
A. Advertisers generally switch from the most widely circulated newspaper to another one only when the other one becomes the most widely circulated newspaper instead.
B. Advertising rates charged by the most profitable newspaper in the city are significantly higher than those charged by its competitors.
C. The most profitable newspaper in the city receives revenue from its subscribers as well from advertisers.
D. The circulation of the most profitable newspaper in the city is still greater than than of any of its competitors.
E. The number of newspapers competing viably with the most profitable newspaper in the city has increased during the last two years.
Any of the following, if true, would help explain the apparent discrepancy between the two statements above EXCEPT:
A. Advertisers generally switch from the most widely circulated newspaper to another one only when the other one becomes the most widely circulated newspaper instead.
B. Advertising rates charged by the most profitable newspaper in the city are significantly higher than those charged by its competitors.
C. The most profitable newspaper in the city receives revenue from its subscribers as well from advertisers.
D. The circulation of the most profitable newspaper in the city is still greater than than of any of its competitors.
E. The number of newspapers competing viably with the most profitable newspaper in the city has increased during the last two years.
Why does C resolves the paradox?
21 Jul 2014, 22:34
Kudos
Bookmarks
pretzel
Here's why C still fits as an explanation:
The question is testing your ability to distinguish between some key terms here: circulation, advertising costs, revenue and profit. Knowing that profit consist of (Revenue - Expenses), and Revenue = (number of units * price), let's evaluate a scenario in which C could be true.
Answer choice C is expanding the scope of the facts given and basically saying that "advertising revenue is not the only factor in determining profit." So the newspaper can earn profit from advertisement sales, but they could also earn it from charging their subscribers. (If you want to take the answer choice to the extreme, you could imagine a scenario where Newspaper A has only 1 subscriber, but he pays a billion dollars to have the paper delivered to his home. Whereas Newspaper B has thousands of subscribers but they get the paper for free (junk in your mailbox). Therefore, Answer C could explain the situation, and is therefore not the correct answer.
Answer E doesn't even address the question at hand, which is why it is the correct answer.
21 Jun 2016, 07:33
Kudos
Bookmarks
Newspaper publishers earn their profits primarily from advertising revenue, and potential advertisers are more likely to advertise in newspapers with a wide circulation a large number of subscribers and other readers than with other newspapers. But the circulation of the newspaper that is currently the most profitable one in this city has steadily declined during the last two years, while the circulation of one of its competitors has steadily increased.
Any of the following, if true, would help explain the apparent discrepancy between the two statements above EXCEPT:
A. Advertisers generally switch from the most widely circulated newspaper to another one only when the other one becomes the most widely circulated newspaper instead.
B. Advertising rates charged by the most profitable newspaper in the city are significantly higher than those charged by its competitors.
C. The most profitable newspaper in the city receives revenue from its subscribers as well from advertisers.
D. The circulation of the most profitable newspaper in the city is still greater than than of any of its competitors.
E. The number of newspapers competing viably with the most profitable newspaper in the city has increased during the last two years.
Can someone please explain the OA ?
Acc to me (Yes i got it right) if the # of newspaper competitors have increased then its circulation share will go down, but it can still remain the most profitable one in the city
Lets say :
Before competition :
A -----> 1000 subs (A gets all the ads and hence makes the max profits)
B -----> 100 subs
TOTAL subs 1100
After some time
A -----> 500 (Subs went down steadily)
B -----> 200 (Subs went up steadily)
C -----> 100
D -----> 100
E -----> 150
F -----> 50
But A is still making the most profit (E helps explaining this)
Please correct me if I am wrong. Thanks in advance.
Any of the following, if true, would help explain the apparent discrepancy between the two statements above EXCEPT:
A. Advertisers generally switch from the most widely circulated newspaper to another one only when the other one becomes the most widely circulated newspaper instead.
B. Advertising rates charged by the most profitable newspaper in the city are significantly higher than those charged by its competitors.
C. The most profitable newspaper in the city receives revenue from its subscribers as well from advertisers.
D. The circulation of the most profitable newspaper in the city is still greater than than of any of its competitors.
E. The number of newspapers competing viably with the most profitable newspaper in the city has increased during the last two years.
Can someone please explain the OA ?
Acc to me (Yes i got it right) if the # of newspaper competitors have increased then its circulation share will go down, but it can still remain the most profitable one in the city
Lets say :
Before competition :
A -----> 1000 subs (A gets all the ads and hence makes the max profits)
B -----> 100 subs
TOTAL subs 1100
After some time
A -----> 500 (Subs went down steadily)
B -----> 200 (Subs went up steadily)
C -----> 100
D -----> 100
E -----> 150
F -----> 50
But A is still making the most profit (E helps explaining this)
Please correct me if I am wrong. Thanks in advance.
