To Facilitate Development Of Telephone Service In A Rural Province GMAT Critical Reasoning

Question: To facilitate development of telephone service in a rural province, the national government pays the provincial government a subsidy for each long-distance call going into the province. A corporation has offered to base a national long-distance telephone service in the province, allowing long-distance calls to be made without any charge to the callers, if the provincial government splits its subsidy with the corporation. The corporation argues that since all calls would be routed through the province, the provincial government would profit greatly from this arrangement.

The corporation's prediction about the effects its plan would have, if adopted, relies on which of the following assumptions?

1. Without the plan, all long-distance telephone service in the province would involve at least some charges to callers.
2. The national government's subsidy would apply not only for calls made to phones in the province, but to at least some long-distance calls that are merely routed through the province.
3. The provincial government would be interested in splitting its subsidy with the corporation only if doing so would yield significant profits for the province.
4. The national government's subsidy for any long-distance call into the province is calculated as a fixed percentage of the charge to the caller.
5. In order for the arrangement to be profitable for the province, the province must receive more from the increased subsidy than it pays the corporation.

“To facilitate development of telephone service in a rural province”– is a GMAT Critical question. To answer the question, a candidate can either find a piece of evidence that would weaken the argument or have logical flaws in the argument. GMAT critical reasoning tests the logical and analytical skills of the candidates. This topic requires candidates to find the argument's strengths and weaknesses or the logical flaw in the argument. The GMAT CR section contains 10 -13 GMAT critical reasoning questions out of 36 GMAT verbal questions.

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