Whenever a major political scandal erupts before an election and voter

Let's say that the mayor of a town always belongs to one of three political parties: X, Y, or Z. The town holds an election every year, voting either to keep the incumbent mayor (if that mayor runs for reelection) or to elect a new mayor.

(Scenario 1): According to this statement, if a major political scandal erupts before one of the annual elections and voters blame the scandal on all three parties about equally, then the incumbent mayor, if seeking reelection, will almost certainly win the election, regardless of the mayor's political party affiliation. In other words, even though the incumbent belongs to a party that is equally blamed for the scandal, the incumbent and his/her party do not suffer negative political consequences.

(Scenario 2): If the current mayor belongs to Party X, and voters blame the scandal on Party X, the current mayor, if seeking reelection, is likely to be defeated by a challenger from Party Y or Party Z. In other words, when the incumbent's party is the ONLY party blamed, the incumbent and his/her party DO suffer negative political consequences.

Now on to the question stem:

The "voters' reactions" are described in the first two sentences: scenario 1) when voters blame a pre-election scandal on all parties equally, the incumbent usually wins, and scenario 2) when voters blame a pre-election scandal on the party of the incumbent, the incumbent usually loses. If we are told that those reactions are guided by a principle, which principle would best account for the contrast in those reactions?

The argument in the passage does not discuss how the voters would react if one incumbent were responsible for one major scandal and another incumbent were responsible for another. Choice (A) can be eliminated.

We are looking for a principle that accounts for the contrast in the voters' reactions (scenario 1 vs scenario 2), and we don't care whether the judgment on which one reaction is based is more accurate than the judgment on which the other is based. Choice (B) can be eliminated.

First, the passage does not consider whether incumbents blamed for a major political scandal should or should not seek reelection. Second, choice (C) only explains the voters' reaction in scenario 2 and does NOT explain the contrast in those reactions. Choice (C) can be eliminated.

This statement does not align with the information in the passage. According to the passage, if incumbents (and hence their parties) are blamed for a pre-election scandal, those incumbents will most likely lose the election, regardless of "who their challengers are." Choice (D) can be eliminated.

First, apply this principle to scenario 2 (the incumbent's party--Party X, for example--receives all of the blame): in that case, Party X can easily be penalized by voting for someone in Party Y or Party Z. Now, consider scenario 1 (for example, the incumbent belongs to Party X but Parties X, Y, and Z all receive equal blame): if we follow the principle in statement (E), we should penalize ALL parties. If we vote for someone in Party Y or Z, one of those parties is rewarded while party X is penalized. There is no way to penalize all parties equally since a member of one of the parties has to win. In that case, the voters might just stick with the default option (the incumbent). Thus, choice (E) is the best choice.