In 2008, the worlds airlines reported an increase in the total

Question

In 2008, the world’s airlines reported an increase in the total number of passengers carried, but a decrease in total revenues, even though prices for airline tickets on all routes remained unchanged from the year before.

Which of the following resolves the paradox described above?

A. The airline industry was a victim of the recession in 2008.

B. Total passenger miles were up in 2008.

C. Fuel costs remained constant from 2007 to 2008.

D. Passengers traveled shorter distances on less expensive flights in 2008.

E. No new aircraft were purchased by any carrier in 2008.

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dhart · Answer

In 2008, the world’s airlines reported an increase in the total number of passengers carried, but a decrease in total revenues, even though prices for airline tickets on all routes remained unchanged from the year before.

Which of the following resolves the paradox described above?

A. The airline industry was a victim of the recession in 2008.

B. Total passenger miles were up in 2008.

C. Fuel costs remained constant from 2007 to 2008.

D. Passengers traveled shorter distances on less expensive flights in 2008.

E. No new aircraft were purchased by any carrier in 2008.

gautamK0206 · Answer

The premise says: The total number of people flying went up, but a decrease in total revenues, even though prices for airline tickets remained the same. If all of this were to be true, then possible explanation is that the cost incurred by the airline went up. We can find the possible reasons for the same.
Out of all the options available,  D. Passengers traveled shorter distances on less expensive flights in 2008.  seems like an appropriate choice. Because passengers shifted to cheaper and shorter flights, the overall money collected by airlines went down even though more people bought tickets.

Vivek1707 · Answer

A. A recession might explain lower revenue, but it doesn't explain how revenue fell while passenger numbers increased.
B. More passenger miles means people traveled farther overall. With unchanged prices, that doesn't explain lower revenue.
C. Fuel costs affect profits, not total revenue. So this is irrelevant.
D. Yes, If more people chose shorter, cheaper flights, total revenue could fall even though the airline carried more passengers and ticket prices themselves didn't change.
E. Whether airlines bought new aircraft has nothing to do with the revenue paradox.

Minka99 · Answer

D makes the most sense.

To repeat the passage -> paradox = more airline passengers BUT less revenues for the airlines. WHY?

A) this is too broad of a statement; we can only assume what the direct effect of the recession were on the airlines
B) this means passengers travelled longer flights. It does not indicate, however, why the revenues fell
C) no change means no answer
 D)  CORRECT shorter, cheaper flights for passengers = less revenues for airlines!
E) this does nothing to explain the paradox. Sure, the airline did not have additional aircraft purchase costs, but we still don't know what caused the drop in revenues

counterclash1 · Answer

Correct Answer: D

PARADOX:
- Passengers UP
- Prices per route CONSTANT
- Total Revenue DOWN

ANALYSIS:
- Revenue = sum(Passengers_route * Price_route)
- Since prices didn't change, the composition of routes must have shifted to cheaper routes.

OPTION EVALUATION:
- A: Out of scope / Too general (recession)
- B: Deepens paradox (passenger miles up)
- C: Irrelevant (costs affect profits, not revenue)
 - D: CORRECT (explains shift to cheaper, shorter routes) 
- E: Irrelevant (capital expenditure)

UpHa · Answer

IMO, D. As it highlights the reason for lower revenue even though the number of passengers who travelled increased.

Bunuel · Answer

Princeton Review Official Explanation:

Here’s How to Crack It:

The question asks for the answer that  resolves the paradox , so this is a resolve/explain question. Your knowledge of question types suggests that the accompanying passage will present two pieces of information, which seem to be in conflict. State that opposition as clearly as possible.

On the one hand, more passengers traveled by air.

On the other, airline revenues decreased, even though ticket prices remained unchanged.

The correct answer to a resolve/explain question will allow both pieces of information to be true simultaneously. Eliminate answers that are out of scope, address only one side of the conflict, or make the conflict worse.

A. The airline industry was a victim of the recession in 2008.

A recession might account for the decrease in revenue, but if ticket prices remained the same, it’s unclear how the number of passengers could have increased. Choice (A) addresses only one side of the conflict, so eliminate it.

B. Total passenger miles were up in 2008.

If passengers flew farther in 2008 and ticket prices remained the same, it’s unclear how revenues could have decreased. Like (A), this answer addresses only one side of the conflict. Eliminate (B).

C. Fuel costs remained constant from 2007 to 2008.

Fuel costs are out of scope. An increase in fuel costs might have affected airline profits, but profits are not revenues. This answer has no bearing on either side of the conflict. Eliminate (C).

D. Passengers traveled shorter distances on less expensive flights in 2008.

This answer looks promising. If the increase in passengers was offset by passengers taking cheaper flights, then revenues could have decreased even as the number of passengers increased. Keep (D).

E. No new aircraft were purchased by any carrier in 2008.

New aircraft are out of scope. The purchase of new aircraft might have affected airline profits, but if no new aircraft were purchased, then new aircraft affected neither profits nor revenues, and this answer has no relevance at all. Eliminate (E).

The correct answer is (D).

In 2008, the worlds airlines reported an increase in the total

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In 2008, the worlds airlines reported an increase in the total