Question

Xylo Corporation is a large manufacturer of solar panels in the town of Southville. It is not only a major employer of the​ town's population, but also attracts a large number of workers from the neighboring county of Canning which has very few job opportunities. Based on industry reports that indicated a substantial increase in installed solar power capacity in the last two​ years, Xylo introduced new production technology to increase efficiency and lower costs at its Southville plant. The senior management decided that they would increase production of solar panels by 20 percent in the coming year to meet the higher demand. They also felt that lower​ costs, along with high expected​ demand, would help them to improve profit margins.​ However, Wilma​ Myers, the​ firm's operations​ head, is not so optimistic about the demand conditions. She feels that the sales in the coming year may not be as high as the senior management is anticipating.  

Which of the​ following, if​ true, would weaken​ Wilma's claim that sales in the coming year may not be very​ high?

A.

Solar energy production costs​ $0.22 per kilowatt hour​ (kWh) while the cost of producing energy from conventional sources like coal is​ $0.05 per kWh.

B.

The cost of switching from conventional to​ non-conventional sources of energy is very high for consumers.

C.

Crystalline​ silicon, a major input in the production of solar​ panels, accounts for almost​ one-fourth of​ Xylo's total costs.

D.

Government banks will now offer loans at interest rates below the market rate for those who want to install solar power rooftops in their homes and businesses.

E.

Market research indicates that consumer awareness about environmental benefits of using solar energy is limited.

Answer 1

Option "D" if true will weaken Wilma's claim that the sales in the coming year may not be very high. If the government is providing cheap loans for the consumers using solar panels it will increase the demand for the panels and Wilma will be wrong.

All the other options point that Wilma is right. If the solar cost more than the conventional coal energy people will use more of coal and less of solar, making Wilma right. If the cost of Switching to sola is also high then people will not use solar much and lastly, if the market research points that people are unaware by the environment loss they will not use solar panels. In all these options Wilma is right except "D".