GMAT Reading Comprehension
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Source: OG13th
Level: 3
Among the myths taken as fact by the environmental managers of most corporations is the belief that environmental regulations affect all competitors in a given industry uniformly. In reality, regulatory costs - and therefore compliance - fall unevenly, economically disadvantaging some companies and benefiting others. For example, a plant situated near a number of larger noncompliant competitors is less likely to attract the attention of local regulators than is an isolated plant, and less attention means lower costs. Additionally, large plants can spread compliance costs such as waste treatment across a larger revenue base; on the other hand, some smaller plants may not even be subject to certain provisions such as permit or reporting requirements by virtue of their size. Finally, older production technologies often continue to generate toxic wastes that were not regulated when the technology was first adopted. New regulations have imposed extensive compliance costs on companies still using older industrial coal-fired burners that generate high sulfur dioxide and nitrogen oxide outputs, for example, whereas new facilities generally avoid processes that would create such waste products. By realizing that they have discretion and that not all industries are affected equally by environmental regulation, environmental managers can help their companies to achieve a competitive edge by anticipating regulatory pressure and exploring all possibilities for addressing how changing regulations will affect their companies specifically.
According to the passage, which of the following statements about sulfur dioxide and nitrogen oxide outputs is true?
- A Older production technologies cannot be adapted so as to reduce production of these outputs as waste products.
- B Under the most recent environmental regulations, industrial plants are no longer permitted to produce these outputs.
- C Although these outputs are environmentally hazardous, some plants still generate them as waste products despite the high compliance costs they impose.
- D Many older plants have developed innovative technological processes that reduce the amounts of these outputs generated as waste products.
- E Since the production processes that generate these outputs are less costly than alternative processes, these less expensive processes are sometimes adopted despite their acknowledged environmental hazards.