A significant amount of the acquisition budget of a typical university

I think analysing such questions unconstrained by the pressures of an exam or a test is much easier then tackling them under the brute of 1.5mins given on the actual exam. Nevertheless rather than pondering the correct answer start by discrediting the WRONG ones:

Actually, no...wait...start by picturing the argument and the premise on which it is based in your head: Publ. Co profits are up -> due to higher subscription costs for universities (by the way I did not think of the typical skeptic's counter-argument that the Publ. Co's revenue mix may include non-universities - and by the way it is always useful to have the Profit = Revenue - Cost equation in your head, as most business and finance advisors and consultants want you to think in P/L terms anyway and you might as well get used to it):

(A) Many university libraries have begun to charge higher and higher fines for overdue books and periodicals as a way of passing on increased journal subscription costs to library users. A: But how this relevant to the profits of the Publishing Company? Wrong
(B) A university library's acquisition budget usually represents only a small fraction of its total operating budget. A: I think the acquisition budget fact is just given to confuse you - how is it relevant to the final argument? Wrong.
(C) Publishing a scholarly journal is an expensive enterprise, and publishers of such journals cannot survive financially if they consistently lose money. A: Okay some traction on the Publishing Houses, which we are concerned with. No link however is provided between the reasoning given for increased profits. Wrong.
(D) Most subscribers to scholarly journals are individuals, not libraries, and the subscription rates for individuals have generally remained unchanged for the past several years. A: this looks better. This calls into question whether the increased subscription rates even have any influence on the revenues of Publ.Cos.
(E) The majority of scholarly journals are published no more than four times a year. A: Again, the final argument is not addressed but this may have confused you in case this implies that such journals are irrelevant to the Publ.Co? Perhaps, but this is not stated in the answer.