PrepTest 111, Section 3, Question 24
Tony: A new kind of videocassette has just(120 more words not shown)
Which one of the following,(14 more words not shown)
- AThe price that(19 more words not shown)
- BA significant proportion(25 more words not shown)
- CThe royalty fee(31 more words not shown)
- DGiven a choice,(26 more words not shown)
- EMany of the(15 more words not shown)
Reading the argument
Do these tapes actually wear out before the store stops needing them?
Tony's price comparison initially seems reasonable: the new tape costs a third as much and lasts half as long. Anna explains why that isn't the whole calculation. The tape is a small part of the movie's purchase price, and the store pays royalties again each time it buys a replacement.
That replacement problem could be serious. But suppose an old tape lasted a million viewings and a new one lasted half a million. If the store never approached either limit, the shorter lifespan wouldn't trigger another purchase. Those are hypothetical numbers; the question is whether the difference in durability actually changes what the store has to buy.
What we’re looking for
We're defending Tony against Anna's reply. My first prediction would be that the tapes don't wear out during their useful lives, so the feared repeat payments don't arise. We can also consider another answer that directly deals with Anna's cost objection. It has to help the case for the cheaper tapes, not merely make a general point about the movie business.
Working the answers
- A
Paying less than ordinary retail customers doesn't tell us which of the two kinds of tape is more economical for the store. The store could receive a discount on both and still face Anna's problem with repeated royalties. The needed comparison is new tapes versus old tapes.
- B
This helps Anna. If a significant share of purchases already replaces worn-out copies, durability affects how often stores buy the same movie again. That gives us more reason to take repeated royalty payments seriously. We are looking for a defense of Tony, so this points in the wrong direction.
- CCorrect
This answers Anna in a different way from my prediction: replacement payments may occur, but each royalty payment is smaller. Anna's argument treats the royalty component as a cost that doesn't shrink along with the cheaper material. C says it is halved.
Compare enough copies to obtain the same number of viewings. Two new tapes would last as long as one old tape. Their two half-sized royalty fees would total one old royalty fee, while their two one-third tape costs would total only two thirds of the old tape cost. For those components, the replacement disadvantage Anna identifies is removed and the material saving remains. C directly supports Tony's side of the comparison without guaranteeing a large overall saving.
- D
This concerns whether customers rent or buy movies at certain prices. It doesn't tell us whether a rental store should stock the old tapes or the new ones. We aren't given a connection between this purchasing preference and the relative costs Anna describes.
- E
More viewings per rental could make wear relevant even when a tape hasn't been rented many times. That doesn't remove Anna's concern about repeated purchases. If anything, faster use of a tape's viewing capacity would make durability and replacement royalties more important, not help Tony escape the objection.
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