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.
