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# When cable TV consumers evade cable access fees by

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06 Aug 2011, 20:25
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When cable TV consumers evade cable access fees by purchasing illegal "pirated" cable boxes, a vicious cycle results. The use of pirated cable boxes by consumers forces cable companies to raise rates, which, in turn, leads more consumers to purchase pirated cable boxes in order to receive free cable programming.

The cycle described above could not result unless which of the following were true?

An increase in cable TV rates causes some consumers to cancel their service or reduce the number of premium channels to which they subscribe.
Some methods for detecting and disabling pirated cable boxes are effective at forcing pirated cable TV consumers to pay user fees or forgo cable TV programming, although the success rates vary considerably.
When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they do not adequately account for revenue that will be lost through pirated cable use.
No one who routinely uses illegal pirated cable boxes can be induced by lower cable access fees to stop using pirated cable boxes unless fines for the use of such boxes are raised at the same time.
Cable TV consumers do not differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes.

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Re: CR - 700 level - cable [#permalink]

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06 Aug 2011, 20:47
I will go with C here.

Purchasing Pirated Set up Boxes -> Rate increase -> Purchasing Pirated Set up Boxes

If the Rates are not increased the cycle would be incomplete.

Crick

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Re: CR - 700 level - cable [#permalink]

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07 Aug 2011, 13:29
I would go with B..........not sure

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Re: CR - 700 level - cable [#permalink]

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07 Aug 2011, 13:50
crick20002002 wrote:
I will go with C here.

Purchasing Pirated Set up Boxes -> Rate increase -> Purchasing Pirated Set up Boxes

If the Rates are not increased the cycle would be incomplete.

Crick

+1

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Re: CR - 700 level - cable [#permalink]

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07 Aug 2011, 14:01
"could not result unless which of the following were true" means this is an assumption question.

C: rising fees of cable company -> more people purchase pirated box
E: more pirated box -> more rising fees

A: cable companies does not accurately set the prices

Ans. C is the best choice.

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Re: CR - 700 level - cable [#permalink]

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08 Aug 2011, 05:32
Why not A,as it says that higher cable prices will lead to cancellation of services and increase piracy
bschool83 wrote:
"could not result unless which of the following were true" means this is an assumption question.

C: rising fees of cable company -> more people purchase pirated box
E: more pirated box -> more rising fees

A: cable companies does not accurately set the prices

Ans. C is the best choice.

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Re: CR - 700 level - cable [#permalink]

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08 Aug 2011, 06:18
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avinash84 wrote:
Why not A,as it says that higher cable prices will lead to cancellation of services and increase piracy
bschool83 wrote:
"could not result unless which of the following were true" means this is an assumption question.

C: rising fees of cable company -> more people purchase pirated box
E: more pirated box -> more rising fees

A: cable companies does not accurately set the prices

Ans. C is the best choice.

+1 for C..
A says that An increase in cable TV rates causes some consumers to cancel their service or reduce the number of premium channels to which they subscribe.
A doesn't say anything wrt piracy..
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Re: CR - 700 level - cable [#permalink]

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08 Aug 2011, 23:41
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good question, fell for E, though agree with choice C.

E: Cable TV consumers do not differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes.

Negate E: TV consumers sometimes differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes.

Negation doesn't hurt the conclusion. Even if consumers differ in acceptable price levels of cable boxes, they will still buy pirated cable boxes. Hence option E is not necessary, therefore not an assumption.

C: When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they do not adequately account for revenue that will be lost through pirated cable use.

Negate C: When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they sometimes adequately account for revenue that will be lost through pirated cable use.

If sometimes cable operators adequately account for revenue loss through pirated cable box use, they will not always raise cable rates to make up for reduced profits. Hence the vicious loop will be broken.
Negation of C hurts the conclusion, hence C is necessary for the conclusion, therefore a required assumption.
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Re: CR - 700 level - cable [#permalink]

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09 Aug 2011, 04:06
i go with B
As per the argument the companies raised charges because of piracy....so unless there is a check consumers would still continue to use pirated cables and the company would still keep on losing revenue.
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Re: CR - 700 level - cable [#permalink]

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09 Aug 2011, 07:30
mehtakaustubh wrote:
i go with B
As per the argument the companies raised charges because of piracy....so unless there is a check consumers would still continue to use pirated cables and the company would still keep on losing revenue.

The answer is C as explained by mayan above

B is out of the scope of question. The company is losing revenue because they didn't account for the loses attributed to piracy in their current rates, hence the need to raise rates.

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Re: CR - 700 level - cable [#permalink]

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09 Aug 2011, 12:21
sorry read the question wrong the question asks for reason for continuation of cycle and so c fits here perfectly..
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Re: CR - 700 level - cable [#permalink]

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09 Aug 2011, 13:06
C is the answer. For the vicious circle to continue....people would be needing to buy more pirated boxes and that would happen only if the cable companies continue to increase rates ( to attain their estimated profit levels). C fits perfectly.
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Re: CR - 700 level - cable [#permalink]

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11 Aug 2011, 00:33
Classic Sunk cost case in Budgeting ..

yes,indeed C it is,as considering it at the first place wouldn't have caused the increase in the fee.
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Re: CR - 700 level - cable [#permalink]

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15 Aug 2011, 10:27
very good question, fell for A but agree with C's explaination
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Re: CR - 700 level - cable [#permalink]

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19 Aug 2011, 23:19
nishtil wrote:
very good question, fell for A but agree with C's explaination

I also chose A and I don't get why C is correct.

The cycle described above could not result unless which of the following were true?
in other words:
The cycle needs what of the following to be complete?

If users buy pirated boxes but do NOT cancel their services (negation of A), the company won't notice anything and not increase prices. Hence, we need people to stop subscription -> company notices -> increases price

I think C would be correct if the question were
The cycle described above could not result WHEN which of the following were true?
in other words:
What do we need to destroy the cycle?

C would be correct in this case, because prices might not be increased -> cycle broken

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Re: CR - 700 level - cable [#permalink]

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20 Aug 2011, 08:10
dangerous question type... fell for B...

If the quest is "The above vicious circle would not happen if which of the following were true?"
then the ans might have been B (open for debate though)

The quest if exactly the opp of what I thought

The vicious circle would not occur unless the cable operators raise their costs.

less people with pirated boxes->normal profits for operators->increasing pirated boxes->less profits for operators->raise costs to increase profits->increasing pirated boxes->..........

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Re: CR - 700 level - cable [#permalink]

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30 Aug 2011, 17:16
An increase in cable TV rates causes some consumers to cancel their service or reduce the number of premium channels to which they subscribe. IRRELEVANT
Some methods for detecting and disabling pirated cable boxes are effective at forcing pirated cable TV consumers to pay user fees or forgo cable TV programming, although the success rates vary considerably. OUT OF SCOPE
When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they do not adequately account for revenue that will be lost through pirated cable use. IF THIS HAPPENS, THE CYCLE WILL NOT RESULT
No one who routinely uses illegal pirated cable boxes can be induced by lower cable access fees to stop using pirated cable boxes unless fines for the use of such boxes are raised at the same time. OUT OF SCOPE
Cable TV consumers do not differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes. TOO EXTREME

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Re: CR - 700 level - cable [#permalink]

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06 Dec 2012, 19:59
I think E is as good an answer. If Cable TV consumers are indifferent in terms of cable access fees, the rise in rates would not necessarily motivate them to close their account and start using illicit cable boxes. and so the cycle would end.
What's wrong with that line of reasoning? Can someone who is to Verbal questions what Bunuel is to Quant questions explain this, please? Thanks.

bschool83 wrote:
An increase in cable TV rates causes some consumers to cancel their service or reduce the number of premium channels to which they subscribe. IRRELEVANT
Some methods for detecting and disabling pirated cable boxes are effective at forcing pirated cable TV consumers to pay user fees or forgo cable TV programming, although the success rates vary considerably. OUT OF SCOPE
When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they do not adequately account for revenue that will be lost through pirated cable use. IF THIS HAPPENS, THE CYCLE WILL NOT RESULT
No one who routinely uses illegal pirated cable boxes can be induced by lower cable access fees to stop using pirated cable boxes unless fines for the use of such boxes are raised at the same time. OUT OF SCOPE
Cable TV consumers do not differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes. TOO EXTREME

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Re: CR - 700 level - cable [#permalink]

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06 Dec 2012, 20:07
Edit:
Actually, on second thought, looks like I misread the question. The question actually asks: the cycle could not result unless which of the following were true, meaning what is the must have ingredient for the cycle to result.
E actually is saying that cable tv consumers are indifferent to cable access fees, meaning they don't care if the rates rise, so they won't switch to illegal cable boxes. this is not a must-have ingredient to making the cycle work, it is the opposite- to make it not work.
i get it. it helps to stare at the question for a while and rephrase it in your head.

koisun wrote:
I think E is as good an answer. If Cable TV consumers are indifferent in terms of cable access fees, the rise in rates would not necessarily motivate them to close their account and start using illicit cable boxes. and so the cycle would end.
What's wrong with that line of reasoning? Can someone who is to Verbal questions what Bunuel is to Quant questions explain this, please? Thanks.

bschool83 wrote:
An increase in cable TV rates causes some consumers to cancel their service or reduce the number of premium channels to which they subscribe. IRRELEVANT
Some methods for detecting and disabling pirated cable boxes are effective at forcing pirated cable TV consumers to pay user fees or forgo cable TV programming, although the success rates vary considerably. OUT OF SCOPE
When cable TV executives establish cable access fees in order to generate an acceptable level of profit, they do not adequately account for revenue that will be lost through pirated cable use. IF THIS HAPPENS, THE CYCLE WILL NOT RESULT
No one who routinely uses illegal pirated cable boxes can be induced by lower cable access fees to stop using pirated cable boxes unless fines for the use of such boxes are raised at the same time. OUT OF SCOPE
Cable TV consumers do not differ with respect to the cable access fees that would cause them to consider purchasing illegal pirated cable boxes. TOO EXTREME

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Re: When cable TV consumers evade cable access fees by   [#permalink] 03 Mar 2014, 01:22
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