MGMAT CR Ed 4 - Chap.5 Problem#6: Network Television

[sieb2004]

In 1984, network television commercials accounted for 80% of all network and non-network television advertising revenue. In 2004, that figure was 60%. During that same period, operating cost for the networks remained steady, and in 2004 every major network announced record setting profits.

The information above, if true, supports which of the following conclusions?

A) Between 1984 and 2004, the number of homes with access to non-network television channels increased by more than 20%.
B) Teenagers comprise a growing proportion of television viewers, and teenagers prefer to watch non-network television shows.
C) The amount of advertising revenue earned from non-network television commercials in 2004 was greater than the amount of revenue earned by network television commercials in 1984.
D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials.
E) Soon revenue from non-network television commercials will surpass revenue from network television commercials.


___________________________________________________
Correct Answer: D

I read the question first and classified this problem as a 'Draw Conclusion' type. Then I read the stimulus + answer choices and solved this problem using POE. Just to mention, I did get the correct answer in first attempt:
A) "the number of homes" --> Out of Scope
B) "Teenagers" -->Out of Scope
C) "amount" --> No information provided in stimulus; only % provided.
D) (Contender)
E) "will surpass" -->Future prediction = requires I make use of a real world assumption --> Out Of Scope.
Therefore, D is the correct answer.
Although I got the answer right but it was because other choices led me to the correct one through elimination (I had only one contender). But I could not understand the official explanation provided in the guide. I have seen similar problems that use dates (such as 1984, 2004 in this one) along with percentages (or numbers) and some of their solutions as posted on forums involve use of maths or deep reasoning. But I am not sure in a CR question if that is the most efficient strategy (Especially if the problem has lot of text as this one). So request you to kindly explain me the solution for this problem and also suggest me a general strategy to solve such problems that involve numbers (in percentage form or number form) so I do not panic when I see such questions on GMAT.

[sieb2004]

PLEASE HELP FOLKS!!:)

[hemanthp]

In 1984, network television commercials accounted for 80% of all network and non-network television advertising revenue. In 2004, that figure was 60%. During that same period, operating cost for the networks remained steady, and in 2004 every major network announced record setting profits.

The information above, if true, supports which of the following conclusions?

A) Between 1984 and 2004, the number of homes with access to non-network television channels increased by more than 20%.
B) Teenagers comprise a growing proportion of television viewers, and teenagers prefer to watch non-network television shows.
C) The amount of advertising revenue earned from non-network television commercials in 2004 was greater than the amount of revenue earned by network television commercials in 1984.
D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials.
E) Soon revenue from non-network television commercials will surpass revenue from network television commercials.

The way you eliminated is good and effective use of time. Here is why D is the right answer:

In 1984 say Network revenue = N_84 and Non-Network revenue = NN_84. so we have 80% = N_84/(N_84+NN_84)

In 2004 say Network revenue = N04 and Non-Network revenue = NN04. So we have 60% = N_04/(N_04+NN_04)
And also that in 2004 profits for network companies were at a record high. Implying that N_04 > N_84.

So, The only way that the network's percentage share could go down despite record revenues (given steady operating costs) is if NN_04 is way more than NN_84 and the rate at which non-network revenue grew more than the rate at which network revenues grew. Otherwise the fraction would make no sense right? Had it been the case that network revenue grew at a higher rate than non-network the percentage share would have increased. D is the only answer supporting this statement.

We have no relation known between network revenues in 1984 and non-network revenues in 2004, eliminating choice C.

[sieb2004]

In 1984, network television commercials accounted for 80% of all network and non-network television advertising revenue. In 2004, that figure was 60%. During that same period, operating cost for the networks remained steady, and in 2004 every major network announced record setting profits.

The information above, if true, supports which of the following conclusions?

A) Between 1984 and 2004, the number of homes with access to non-network television channels increased by more than 20%.
B) Teenagers comprise a growing proportion of television viewers, and teenagers prefer to watch non-network television shows.
C) The amount of advertising revenue earned from non-network television commercials in 2004 was greater than the amount of revenue earned by network television commercials in 1984.
D) Between 1984 and 2004, advertising revenue earned from non-network television commercials grew at a faster rate than revenue earned from network television commercials.
E) Soon revenue from non-network television commercials will surpass revenue from network television commercials.

The way you eliminated is good and effective use of time. Here is why D is the right answer:

In 1984 say Network revenue = N_84 and Non-Network revenue = NN_84. so we have 80% = N_84/(N_84+NN_84)

In 2004 say Network revenue = N04 and Non-Network revenue = NN04. So we have 60% = N_04/(N_04+NN_04)
And also that in 2004 profits for network companies were at a record high. Implying that N_04 > N_84.

So, The only way that the network's percentage share could go down despite record revenues (given steady operating costs) is if NN_04 is way more than NN_84 and the rate at which non-network revenue grew more than the rate at which network revenues grew. Otherwise the fraction would make no sense right? Had it been the case that network revenue grew at a higher rate than non-network the percentage share would have increased. D is the only answer supporting this statement.

We have no relation known between network revenues in 1984 and non-network revenues in 2004, eliminating choice C.

Thanks a lot hemanthp. This indeed helps!! But I was wondering if there is another strategy besides involving even simplest form of maths on similar CRs. I am actually trying to find the most efficient way to solve problems like this one. Here is my real concern: In 'Draw a Conslusion' type, our task is to determine what 'MUST BE TRUE' logically. However, when we involve maths, we are inadvertently trying to determine 'WHAT IS TRUE' which, I think, is more time consuming than determining what 'MUST BE TRUE'. POE indeed gave me an efficient way but I think the difficulty level of this problem would have increased if, hypothetically, there were more than one contenders (Typical 700+ level). Although the time we take to prove 'WHAT IS TRUE' may not be a lot in a single contender situation, but in a multiple contender this time can add.

Here is another way to look at what I mentioned:
Categories of Answers for 'Draw a Conclusion' questions (w.r.t the time it takes to qualify the answer as Incorrect/Correct):
1) NOT TRUE --> Takes least amt of time to determine (no keywords would do)-->Incorrect so rule it out!
2) NOT ALWAYS TRUE / COULD BE TRUE -->Takes some Time to Determine (some keywords present)-->But Incorrect so rule it out too!
3) MUST BE TRUE --> Takes some time to determine (keywords present and logically related to C or (A) )--> Correct Answer.
4) IS TRUE --> Takes most amt of time to determine (keywords present + we trying to prove if the statement is actually TRUE) -->Also Correct Answer

So with both our approach (your suggestion + mine) I think we have a best practice: when we have just one contender, we may not need any math on similar CRs--POE is a better choice-- but when we do have more than one contender then we will have to use math to prove 'WHAT IS TRUE' because we can't determine what 'MUST BE TRUE' logically.

Experts please pitch in!:)

[tim]

nice job, hemanthp. yes, there are two ways to go here: use math, or go with the method that allows you to eliminate the other choices quickly..

[sieb2004]

Thanks Tim!

[jnelson0612]

Good work everyone. My favorite approach to this type of question is to knock out the obvious wrong answers first, then use logic and number substitution to confirm my answer.

Remember, on the GMAT verbal four wrongs make a right! Thus, a POE approach is generally very helpful.