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  3. Clearbell Telephone provides slow-dialing (SD) service to customers for a low fe

Clearbell Telephone provides slow-dialing (SD) service to customers for a low fe

游客2024-01-12  10
问题 Clearbell Telephone provides slow-dialing (SD) service to customers for a low fee, and fast-dialing (FD) service to other customers who pay a somewhat higher fee. FD technology, however, is so efficient that it costs Clearbell substantially less per average call to provide than does SD. Nonetheless, accountants have calculated that Clearbell’s profits would drop if it provided FD to all its customers at the current low-fee rate.
Assume that installation costs for FD are insignificant if the customer already has SD service. Which of the following, if true about Clearbell, best explains the results of the accountants’ calculation?
选项 A、The extra revenue collected from customers who pay the high fee is higher than the extra cost of providing SD to customers who pay the low foe.
B、The low fee was increased by 6 percent last year, whereas the higher fee was not increased last year.
C、Although 96 percent of customers regard FD service as reliable and more convenient than SD, fewer than 10 percent of them choose to pay the higher fee for FD service.
D、The company’s competitors generally provide business customers with FD service at low-fee rates.
E、Profits rose slightly each month for the first three months after FD was first offered to customers, then fell slightly each month for the succeeding three months.
答案 A
解析 The argument suggests that fast-dialing (FD) service costs Clearbell Telephone less to deliver per call than does slow-dialing (SD) service, which Clearbell delivers at a lower fee. There are no significant extra costs such as installation to switch to FD if a customer is already a user of SD. Nevertheless, accountants expect Clearbell’s profits to decrease if the company were to provide the high-priced FD service at the lower SD rate. Our goal here will be to find a reason for this apparent contradiction.
A    Correct. This answer provides a plausible reason for the contradiction. Ultimately, we do not know the amount of extra fee that FD customers pay relative to SD customers. If the higher FD fees make up a substantial portion of the company’s revenues, then it is very possible that the proposed change would reduce revenues significantly enough to lower profits. Remember, the SD service actually costs more for Clearbell Telephone. Therefore, the balance to find is whether the current higher FD fees generate more revenue than the money saved by eliminating SD service and instead providing FD services at the low fee.
B    This statement provides information about how Clearbell’ s current prices were set. However, it provides no information as to how the proposed changes might affect profits.
C    This statement does not explain the results of the accountants’ calculations. First, customers’ preference is irrelevant to the accountants’ results. Second, if we were to assume that 10 percent is a small figure, it is still possible that FD fees are great enough to offset the extra costs Clearbell incurs by providing SD service. Third, since the cost to Clearbell is less per call using FD service, Clearbell’s profits may in fact increase if all customers were to be given FD service.
D    This statement is outside the scope of the argument. First, practices of Clearbell’s competitors have no bearing on the accountants’ calculations. Second, we have no way to determine what the change in Clearbell’s profits and its competitive position might be if Clearbell were to provide FD service at the low-fee rate to its business customers. Third, given the facts provided in the argument, it is entirely possible that Clearbell already gives preferential rates for FD service to its business customers.
E    This information does not help explain the results of the accountants’ calculations. Simply because the changes in profit and the introduction of FD service happened at roughly the same time, we cannot assume that one caused the other. That is, it is possible that these fluctuations in profit are due to normal, perhaps seasonal, fluctuations in profits. Therefore, these fluctuations would not necessarily negatively impact Clearbell’s overall level of profitability.
The correct answer is A.
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