The fares charged by taxicabs in Centerville are set by the city counc

Question

The fares charged by taxicabs in Centerville are set by the city council. Last year the council approved an increase in fares sufficient to offset rising vehicle maintenance costs paid by taxi drivers. In the year since then, no new taxi licenses were issued, taxi ridership has been up, but the average net income of taxi drivers, excluding tips, has been down.

The information given, if accurate, most strongly supports which of the following?

A. In the past year, taxi drivers' expenses have risen in at least one category other than vehicle maintenance.
B. In the past year, taxi drivers, on average, worked longer hours than they had the year before.
C. In the past year, the average amount of tips earned by taxi drivers was less than it had been the year before.
D. Ridership on Centerville's public transportation system has been growing for several years.
E. A growing percentage of Centerville's citizens rely on taxicabs for all of their local transportation needs.

Official Mock test 5

https://gmatclub.com/forum/download/file.php?id=76923

madkilla07 · Answer

The OA is A but I eliminated it as income could have increased along with expenses. Could you please explain this?

Bunuel · Answer

Can you please share the source of the question? Thank you!

madkilla07 · Answer

Question is from official mock 5.

Bunuel · Answer

Thank you very much! That helps.

sayan640 · Answer

Very easy , solved it under 1.3 minutes. Despite the fare increase , the net income of taxi drivers dint increase. 
That indicates that the expenses incurred by the taxi drivers has increased at least in some other category.
A is the answer.
Hope it helps.  madkilla07

Posted from my mobile device

sayan640 · Answer

Income can increase only by fare increase and it was supposed to offset the vehicle maintenance cost.
But it dint as the drivers are still struggling to increase their net income.
There has to be at least one category which is costing the drivers , reducing their net income.
Hope it clarifies.

Posted from my mobile device

madkilla07 · Answer

Yes thank you. Now that i see the question it seems so simple but yea during the exam it was a different deal.

UmangPatrick · Answer

I understand the line of reasoning above, but for A, other category isn't something which is outside information? As we aren't supposed to bring in outside information and should stay within the premise.

Can someone else what I'm missing here.

Can someone else what I'm missing here.

Yugank_Aggarwal · Answer

Hey, my approach to this statement was based on a basic accounting principle or fact which says that: Net Income = Total income - all expenses Based on this, i was able to understand that though the total income might have increased, some category of expenses would have increased too, leading to the overall negative impact. Hope this helps. Cheers

yash2701 · Answer

@bunnel, Can you explain why is this question tagged under inference type ?

Bunuel · Answer

I think this is an Inference question because it provides facts and asks what is most strongly supported by them, that is, what logically follows from the given information.

The fares charged by taxicabs in Centerville are set by the city counc

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GMAT Critical Reasoning (CR) Questions

The fares charged by taxicabs in Centerville are set by the city counc

Prep Toolkit

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