Paper & Print is a chain of British stores selling magazines, books, a

OFFICIAL EXPLANATION

Reasoning- What would make it least likely that devoting more of the business to books and stationery, and less to magazines, would increase profits? The reasoning behind the plan is that Paper&Print has a greater profit margin on books and stationery than it can legally attain on magazines, and that carrying more items with higher profit margins and fewer with lower profit margins will increase overall profits. A weakness in this reasoning is that profits depend on actually selling items, not merely on carrying them. If magazines sell far more briskly than other merchandise, shelf space devoted to magazines may generate higher profits, despite the magazines’ lower profit margins. If this were the situation, the plan might backfire and fail to increase profits.

A. Lower retail prices on magazines could lower Paper&Print’s profits per magazine sold and hence make the plan to devote more shelf space to merchandise other than magazines more likely to increase overall profits.
B. Correct. If far more customers shop at Paper&Print for its broad range of magazines than for its books and stationery, then cutting the shelf space devoted to magazines may disappoint the customers, reducing overall sales and profits.
C. Paper&Print’s magazine profits come from the 25 percent of the magazines’ retail price that goes to the retailer, no matter who gets the rest.
D. This would tend to reduce Paper&Print’s magazine sales and hence make the plan to devote more shelf space to merchandise other than magazines more likely to increase overall profits.
E. This would tend to increase Paper&Print’s book sales at some stores and hence make the plan to devote more shelf space to books rather than magazines more likely to increase overall profits.

The correct answer is B.