The downtown shopping mall in Metroville is struggling

Question

The downtown shopping mall in Metroville is struggling to attract shoppers, and many of its retail spaces are now vacant. In order to attract enough new retailers to generate the revenue necessary to prevent the mall from closing, the mall owners plan to add free amenities such as a dog run and an ice rink to entice shoppers into the mall.

Which of the following would, if true, most strongly support the claim that the mall owners' plan, once implemented, would fail to achieve its goal?

(A) Many Metroville residents frequent the town's existing outdoor dog runs and ice rink.
(B) Monthly operating costs for the proposed new amenities would exceed the total monthly revenue that the mall owners could gain from contracts for use of the vacant retail spaces.
(C) If the amenities do not attract enough new retailers to generate significant revenue, the mall will have to close.
(D) New retailers will not rent the vacant retail spaces at the mall unless more visitors start frequenting the mall.
(E) Currently, Metroville residents who visit the nearest dog runs and ice rinks usually do not go shopping during the same outing.

WINIFREDWU1103 · Answer

Can anyone explain why B is not right?

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carcass · Answer

CR is just that: logic.

here the plan to have success or in our case why it will fail we have to see the behavior of the customers.

B is just a statistic about possible revenue that will exceed the losses but nothing about customers

E iinstead

(E) Currently, Metroville residents who visit the nearest dog runs and ice rinks  usually do not go shopping during the same outing.

That is the reason why E is correct.

Be aware of this questions: this kind of CR was proposed by GMAT 15 years ago. They are still valid but now CR are more tricky and sophisticated

tanishqgirotra · Answer

I feel like E is acts more like a strengthener as it mentions 'currently'. what if now people get attracted by these amenities and start going to the retail outlets in the mall

zhengjunru · Answer

I am confused with B. The aim of plan is to attract retailers to generate revenue, and I think B states that this plan can not generate revenue. Revenue is the ultimate aim. I have no idea why B is wrong. Could you give some advice?

adi007 · Answer

I wont fully Agree with E. Since the objective is to attract more customer so that vacant rental spaces can be occupied hence will increase the revenue. 
But, E says -> Metroville residents who visit the nearest dog runs and ice rinks usually do not go shopping during the same outing. Will they shop or not at the same time but that will anyway attract more traction to get rental spaces by brands. Revenue problem can be solved.

However, B says -> Monthly operating cost > revenue from rentals. Which does not solve the problem for the mall since it will increase the loss and the mall will inevitably have to close. Which is proving that the plan will fail.

parthh1234 · Answer

Hello Adi,

I believe the reason for B being incorrect lies in the conclusion. As mentioned in the first sentence, Goal is to attract shoppers. Owner is not looking at revenue or anything but only trying to attract shoppers. 
Option B talks about revenue and operating costs but never really answers about shopper whereas Option E correctly mentions that residents visiting dog runs and ice rinks are not shoppers. So, these residents will become visitors to mall but not the shoppers.

PK456 · Answer

Not convinced with the answer or the reasoning in the comments above. Could someone please explain why the answer is not B

egmat · Answer

Answer B says:  "Operating costs for amenities exceed total revenue from vacant retail spaces."

Here's why this doesn't prove failure: 
The goal isn't "make a net profit from the amenities themselves." The goal is "generate revenue necessary to prevent mall closure."

Consider this scenario where B is true BUT the plan succeeds: 
 
 Amenity costs: $50,000/month 
 Revenue from NEW retailers in vacant spaces: $40,000/month 
 Net from this equation: -$10,000/month

BUT: 
 
 Amenities bring shoppers 
 Existing stores (not vacant) see increased sales 
 These existing stores pay HIGHER rent due to increased foot traffic 
 Mall makes $30,000/month MORE from existing tenants 
 Total impact: -$10,000 + $30,000 = +$20,000/month 
 Mall saved from closure ✓

B only looks at ONE revenue stream (vacant spaces) and ignores that the mall has OTHER revenue sources  (existing tenants, increased lease renewals, parking fees, etc.).
  The plan can succeed even if B is true.

AnishTrivedi99 · Answer

I agreed with this and wanted to rule B out.

But E says that currently people don't shop during dog runs or ice rinks. We don't know if currently the nearest dog runs or ice rinks are inside a mall, do we? What if these amenities being inside a mall will entice people to go to the mall's shops? Hence I went with B.

Would love yours and others' opinions on this!

The downtown shopping mall in Metroville is struggling

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The downtown shopping mall in Metroville is struggling