GMAT Critical Reasoning
Southern Haul Cargo Railway owns all of the railroad tracks in the city of Woe-be-gone, Idaho. Because of Woe-be-gone's sudden population explosion, Southern Haul Cargo is planning to make a Metropolitan Rail and Subway system using its pre-existing tracks. The city council has concluded, however, that if the cargo railway were to offer subway transport, the transport system would have an unfair advantage over the city's existing bus routes, because Southern Haul Cargo's subway system could be subsidized by the profits of their monopoly on cargo transport.
Based on the information given above, which of the following questions can be answered?
- A Is a cargo railway as efficient as a subway in providing transport by rail?
- B If the cargo railway were allowed to provide bus transport, would it want to do so?
- C Does the city believe that Southern Haul Cargo Railway makes a profit on cargo transport?
- D Is the cargo railway forbidden to offer bus transport?
- E Is it expected that the cargo railway will have a long-term monopoly on commuter traffic?
Correct Answer: C