The government of a small country, Ecotopia, is investigating whether a leading
ID: 1115700 • Letter: T
Question
The government of a small country, Ecotopia, is investigating whether a leading telephone company, Ringabell Telco, has violated antitrust laws. Recent media reports claim that Ringabell keeps its rates too low in order to attract customers away from the competition. This, the media claims, is the reason for Ringabell's large market share. However, a spokesperson for Ringabell defends the company by stating that its dominant market share speaks for the quality of its services and strong customer loyalty.
Which of the following, if true, would weaken the media's argument?
A.
Ringabell reported a growth of 14 percent in revenues over the previous quarter.
B.
One of Ringabell's competitors filed for bankruptcy protection from creditors.
C.
Ringabell has the capacity to cater to the entire telecom market at a very low cost.
D.
Ringabell's television network has never been profitable.
E.
Ringabell's technology is similar to that used in other countries.
Explanation / Answer
The government of a small country , Ecotopia, is investigating whether a leading telephone company, Ringabell Telco, has violated antitrust laws. Media reports claim that ringabell keeps its rates too low in order to attract customers away from the competition. This, is the media claims is the reason for Ringabell's large market share. However , a spokeperson for Ringabell defends the company by stating that its dominant market share speaks for the quality of its services and strong customer loyalty.
Therefore , according to the question the statment that would weaken the media's argument is :
Ringabell reported a growth of 14% in revenues in the previous quarter because profits are maximum when the revenue is larger than the costs . And here the cost is kept minimum and revenues are increasing so , the profits are more than any other company.
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