Electric Utilities Pay Less for Low-Quality Coal Per Ton GMAT Critical Reasoning

Question: Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high-quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.

The considerations above, if true, most strongly support which of the following claims?

(A) A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible.
(B) In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal.
(C) Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal.
(D) It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.
(E) In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.

“Electric utilities pay less for low-quality coal per ton”- is a GMAT critical reasoning topic. This GMAT Critical Reasoning topic has been taken from the book ‘GMAT Prep Plus.’

This GMAT critical comes with five options and candidates need to choose the one which is correct. GMAT critical reasoning tests the logical and analytical skills of the candidates. 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. Candidates get 65 minutes to answer 36 MCQ questions in the critical reasoning section of the GMAT.

Answer: A
Explanation: Low-quality coal costs less per ton, but burning low-quality coal generates electricity less efficiently and produces more ash. Which utilities must pay an increasing amount to dispose of. It’s unclear whether overall coal purchasing costs are lower with low-quality or high-quality coal. Since the lower price per ton of the former may counterbalance the need to buy more tons to generate the same amount of electricity. Although ash disposal is becoming more expensive. We are not told how that expense compares to those of the other factors mentioned; it may be negligible.

Option A
A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible.- This is correct. Utility companies must use more low-quality coal even if they pay less for it, and they must also pay disposal costs for the ash. Therefore, if the expenses outweigh the benefits, a policy of consistently purchasing low-quality coal could not always result in economic advantage.

Option B
In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal.- Incorrect. Even if disposing of coal ash doesn't cost much, utilities still have to purchase additional low-quality coal to produce the same quantity of energy. Therefore, by using more low-quality coal, the savings from purchasing it (as opposed to high-quality coal) may be offset. Therefore, it is not reasonable to draw the conclusion that purchasing high-quality coal will cost more in this instance.

Option C
Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal.- Incorrect. We are not given any information on the proportion of expenditures involved, thus we are unable to draw this conclusion.

Option D
It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.- Incorrect. We are given no information about disposal costs, so we cannot compare.

Option E
In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.- Incorrect. The cost of disposing of the ash produced by burning coal is not used to determine how quickly coal stocks are depleting. We can't legitimately reach this conclusion.

Suggested GMAT Critical Reasoning Samples

• The Board of Trustees of the Federici Art Museum has decided to sell GMAT Critical Reasoning
• Fish Breeder: A Rare Illness Known As Smith-Kreal Disease is Spreading GMAT Critical Reasoning
• Trancorp currently transports all its goods to Burland Island by truck GMAT Critical Reasoning
• The City Council will Certainly Vote to Approve the New Downtown GMAT Critical Reasoning
• Concerned citizen: The Mayor, an Outspoken Critic of the Proposed GMAT Critical Reasoning
• All German Philosphers, except for Marx, are Idealists GMAT Critical Reasoning
• The Cost of Producing Radios in Country Q is 10 Percent Less GMAT Critical Reasoning
• Helen: It was wrong of my brother Mark to tell our mother that GMAT Critical Reasoning
• Local Phone Companies Have Monopolies On Phone Service Within Their Areas GMAT Critical Reasoning
• Today's low gasoline prices make consumers willing to indulge GMAT Critical Reasoning
• Athletic director: “Members of our sports team included, for the fall season GMAT Critical Reasoning
• Research Indicates That College Professors Generally Were Raised GMAT Critical Reasoning
• Residents of an apartment complex are considering two possible plans GMAT Critical Reasoning
• At An Enormous Research Cost A Leading Chemical Company Has Developed GMAT Critical Reasoning
• A Reliable Survey Indicates That College Graduates Change Employers Four Times GMAT Critical Reasoning
• In 1988, a significant percentage of seals in the Baltic Sea died GMAT Critical Reasoning
• Contrary to the charges made by some of its opponents GMAT Critical Reasoning GMAT Critical Reasoning
• A Year After The Start An Experiment To Decrease Crime GMAT Critical Reasoning
• Since the invention of digital readout, machine designers have rushed GMAT Critical Reasoning
• The President of a Consulting Firm Analysed the Decisions Made About Marketing GMAT Critical Reasoning