A recent spate of launching and operating mishaps with television satellites led to a corresponding surge in claims against companies underwriting satellite insurance. As a result, insurance premiums shot up, making satellites more expensive to launch and operate. This, in turn, had added to the pressure to squeeze more performance out of currently operating satellites.

Which of the following, if true, taken together with the information above, best supports the conclusion that the cost of television satellites will continue to increase?

Since the risk to insurers of satellites is spread over relatively few units, insurance premiums are necessarily very high.

When satellites reach orbit and then fail, the causes of failure are generally impossible to pinpoint with confidence.

The greater the performance demands placed on satellites, the more frequently those satellites break down.

Most satellites are produced in such small numbers that no economies of scale can be realized.

Since many satellites are built by unwieldy international consortia, inefficiencies are inevitable.


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