GWD tn 7-24 好像没有讨论过

GWD-9-Q24:

For similar cars and drivers, automobile insurance for collision damage has always cost more in Greatport than in Fairmont. Police studies, however, show that cars owned by Greatport residents are, on average, slightly less likely to be involved in a collision than cars in Fairmont. Clearly, therefore, insurance companies are making a greater profit on collision-damage insurance in Greatport than in Fairmont.

Which of the following is an assumption on which the argument depends?

A.      Repairing typical collision damage does not cost more in Greatport than in Fairmont.

B.       There are no more motorists in Greatport than in Fairmont.

C.      Greatport residents who have been in a collision are more likely to report it to their insurance company than Fairmont residents are.

D.      Fairmont and Greatport are the cities with the highest collision-damage insurance rates.

E.       The insurance companies were already aware of the difference in the likelihood of collisions before the publication of the police reports.

Don't understand why the key is A? 大家有否讨论过？

Profit = Insurance proceeds – Cost of claim = Number of insurers * price – ( Total accidental cases / Number of insurers) * Cost of recovery per accident

Hold Number of insurers constant.

“Greatport residents are, on average, slightly less likely to be involved in a collision than cars in Fairmont” Lower total accidents means lower cost of claim and results higher profits.

If not result higher profit, it must follow the logic that the cost of recovery per accident is higher. This effect will substitute the effect of lower total number of accident.

In conclusion, there is no effect on cost, and the profit stay the same