(C) CORRECT.
If consumers would not choose to order all of the channels
they currently buy as part of a package subscription, then the television
industries’ claim that à la carte pricing would always be more expensive is
suspect. If many consumers only watch and wish to pay for a few of their
favorite channels, à la carte pricing could very well result in lower cable bills
for those consumers.
(D) According to the argument, the decision concerns only the costs to
consumers, not the number of consumers who subscribe. If there were some
pricing consequences as a result of a loss of subscribers, the point might be
relevant, but no such information is given.
(E) According to the argument, the decision is to be based only on the costs to
consumers, not the technical equipment requirements a change in cost
structure would require.
56.
(A).
The argument provides information about the substantial costs
associated with the development of Dendadrine. Yet the management views
Dendadrine as a highly profitable project. To reconcile these claims, the
correct answer choice will demonstrate that the drug will generate profits that
will more than compensate for the high initial expenditures associated with its
development.
(A) CORRECT.
If management expects to earn patent protection for the new
drug, then the company can also expect to charge the unusually high prices
that will more than compensate for the initial research and development costs.
(B) While this choice explains the high costs associated with the development
of Dendadrine, it says nothing about how well such products do on the market
and whether they subsequently become profitable.
(C) Although this choice supports the idea that Dendadrine will sell well, it
does not specifically support the contention that the drug will be profitable in
the face of unusually high costs.
(D) Although this choice supports the idea that Dendadrine will be the
primary, if not only, treatment for this market segment, it does not support the
contention that the drug will be profitable in the face of unusually high costs.
(E) Although this choice supports the idea that the market for Dendadrine is
very large and will generate revenues in excess of $5 billion within a few
years, it does not specifically support the contention that the drug will be
profitable in the face of unusually high costs.
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