QUESTION TEXT: Anna's reply is structured to lead to…
QUESTION TYPE: Complete the Argument
ARGUMENT: Anna points out that video cassette costs are only a small part of the price a rental store has to pay. Royalties are the main cost. Tony’s proposal would actually increase royalty payments.
ANALYSIS: Anna is heading toward the conclusion that Tony’s scheme would be more expensive.
- Anna hasn’t said whether royalties are fair or not. She just pointed out that they cost a lot more than the videocassettes themselves.
- Anna’s argument is that video cassette costs are minimal compared to royalties. The cost savings come from lower royalties rather than durability.
- Anna doesn’t say anything about rental fees. Maybe employee salaries and building rent are the major components of that cost. Regardless, her main conclusion will be about whether the video stores should buy the new cassettes.
- CORRECT. Increased royalties will destroy most of the cost savings that Tony mentions.
- Anna doesn’t say anything about rental fees.
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