Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last...
GMAT Critical Reasoning : (CR) Questions
Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars.
Which of the following, if true, does most to help explain why the increased cost-efficiency of solar power has not decreased its threshold of economic viability?
Passage Analysis:
| Text from Passage | Analysis |
|---|---|
| Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade. |
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| However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars. |
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Argument Flow:
The passage presents what seems like a contradiction: solar power has become much more cost-efficient, but its competitive threshold against oil hasn't budged. This creates a puzzle that demands an explanation.
Main Conclusion:
There's no explicit conclusion here - instead, the passage sets up a paradox that needs explaining. The puzzle is: why hasn't solar's improved cost-efficiency made it more competitive against oil?
Logical Structure:
This isn't a traditional argument structure. Instead, it's a setup for a question. The author gives us two facts that seem to contradict each other, creating a logical puzzle that the question stem asks us to resolve.
Prethinking:
Question type:
Paradox - We need to explain why solar power's improved cost-efficiency hasn't made it more competitive against oil (why the $35/barrel threshold remains unchanged)
Precision of Claims
The argument makes specific quantitative claims: solar has become 'far more cost-efficient' due to technological improvements and reduced equipment costs, yet the economic viability threshold remains precisely at $35/barrel for oil
Strategy
For paradox questions, we need to find information that reconciles the apparent contradiction. The puzzle is: if solar got cheaper, why didn't this make it more competitive versus oil? We need to think of factors that could have simultaneously made oil MORE attractive or created offsetting disadvantages for solar, keeping the competitive balance unchanged despite solar improvements
The cost of oil has fallen dramatically. This doesn't help explain the paradox. We're told about a threshold price (($35/\mathrm{barrel})) that oil would need to reach for solar to be more economical, not about oil's current price. The threshold represents the break-even point for new plant construction, which wouldn't change just because oil's current market price fell. This choice confuses current oil prices with the economic viability threshold.
The reduction in the cost of solar-power equipment has occurred despite increased raw material costs for that equipment. This actually makes the paradox worse rather than explaining it. If solar equipment costs went down even though raw materials got more expensive, that suggests solar efficiency improvements were even more dramatic than initially apparent. This should have made solar even more competitive against oil, yet the threshold remained unchanged. This deepens the mystery rather than resolving it.
Technological changes have increased the efficiency of oil-fired power plants. This perfectly explains the paradox! While solar power became more cost-efficient, oil-fired power plants simultaneously became more efficient too. These parallel improvements in both technologies explain why their relative competitive positions remained unchanged - both got better at roughly the same rate, keeping the ($35/\mathrm{barrel}) threshold constant. When both competitors improve simultaneously, their relative standings can remain static.
Most electricity is generated by coal-fired or nuclear, rather than oil-fired, power plants. This is irrelevant to the specific comparison being made in the passage. We're told about the economic threshold between solar and oil-fired plants specifically. What other types of plants generate most electricity doesn't impact the competitive relationship between these two particular technologies. This is a classic irrelevant information trap.
When the price of oil increases, reserves of oil not previously worth exploiting become economically viable. This discusses oil supply dynamics but doesn't address why the competitive threshold between solar and oil plants remained unchanged despite solar's efficiency gains. The availability of additional oil reserves doesn't explain why solar's improvements didn't shift the economic balance between these two power generation methods.