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playthegame
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Joined: 19 Jan 2024
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Updated on: 06 Feb 2024, 00:19
Originally posted by playthegame on 05 Feb 2024, 16:59.
Last edited by Bunuel on 06 Feb 2024, 00:19, edited 1 time in total.
Last edited by Bunuel on 06 Feb 2024, 00:19, edited 1 time in total.
Added the OA.
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D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
69% (02:29) correct
31%
(02:36)
wrong
based on 224
sessions
History
Date
Time
Result
Not Attempted Yet
Tony: A new kind of videocassette has just been developed. It lasts for only half as many viewings as the old kind does but costs a third as much. Therefore, video rental stores would find it significantly more economical to purchase and stock movies recorded on the new kind of videocassette than on the old kind.
Anna: But the videocassette itself only accounts for 5 percent of the price a video rental store pays to buy a copy of a movie on video; most of the price consists of royalties the store pays to the studio that produced the movie. So the price that video rental stores pay per copy would decrease by considerably less than 5 percent, and royalties would have to be paid on additional copies.
Anna’s reply is structured to lead to which one of the following conclusions?
(A) The royalties paid to movie studios for movies sold on videotape are excessively large.
(B) Video rental stores should always stock the highest-quality video cassettes available, because durability is more important than price.
(C) The largest part of the fee a customer pays to rent a movie from a video rental store goes toward the royalties the store paid in purchasing that movie.
(D) The cost savings to video rental stores that buy movies recorded on the cheaper videocassettes rather than movies recorded on the more durable ones will be small or nonexistent.
(E) If the price a video rental store pays to buy a movie on videocassette does not decrease, the rental fee the store charges on the movie will not decrease.
Anna: But the videocassette itself only accounts for 5 percent of the price a video rental store pays to buy a copy of a movie on video; most of the price consists of royalties the store pays to the studio that produced the movie. So the price that video rental stores pay per copy would decrease by considerably less than 5 percent, and royalties would have to be paid on additional copies.
Anna’s reply is structured to lead to which one of the following conclusions?
(A) The royalties paid to movie studios for movies sold on videotape are excessively large.
(B) Video rental stores should always stock the highest-quality video cassettes available, because durability is more important than price.
(C) The largest part of the fee a customer pays to rent a movie from a video rental store goes toward the royalties the store paid in purchasing that movie.
(D) The cost savings to video rental stores that buy movies recorded on the cheaper videocassettes rather than movies recorded on the more durable ones will be small or nonexistent.
(E) If the price a video rental store pays to buy a movie on videocassette does not decrease, the rental fee the store charges on the movie will not decrease.
06 Feb 2024, 00:25
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Similar question to practice: https://gmatclub.com/forum/tony-a-new-k ... 55474.html
06 Feb 2024, 00:44
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Anna counters Tony's argument by claiming that even though the cost per video casette will go down, the rental store will have to pay more in royalties, as there will now be a higher number of video casettes.
Option A is out of scope of the argument.
Option B is not what Anna is suggesting.
Option C is tricky. Anna is talking about what the STORE is paying per casette, it is not at all talking about what in turn the store is charging the customer. Therefore this is a runner up.
Option D correctly states Anna's conclusion.
Option E is again, not in scope of the argument.
Therefore, OA is D.
Option A is out of scope of the argument.
Option B is not what Anna is suggesting.
Option C is tricky. Anna is talking about what the STORE is paying per casette, it is not at all talking about what in turn the store is charging the customer. Therefore this is a runner up.
Option D correctly states Anna's conclusion.
Option E is again, not in scope of the argument.
Therefore, OA is D.
