80% of the revenue of club comes from annual members. STill, cafe gets only 40% of revenue from health club members.

Pre thinking: Some one else is using cafe more than these members.

A. Only people who pay to use the health club are allowed access to the café. --> Then how come only 40% revenue from these members?

B. Members with 3 and 6 month memberships use the café much more than annual members do. --> Initially, I fell into this trap but later realized that surprising thing is saying 40% of all members and not just annual members.

C. The café is most appealing to people who have never been to the club before. --> Okay, so here we find outside people are more interested in cafe.

D. The café only offers a small variety of food items when compared to nearby restaurants. --> Come on! I dont care what it offers.

E. Members get a 10% discount on food at the café. --> then they should have used it, right?
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D - Well, if the gym members do not find the food options satisfactory, and eat at a restaurant nearby, where is the 60% revenue coming from? Because if gym members need to eat at a nearby restaurant, why would a non gym member visit the cafe?

C - Clearly explains that the cafe is appealing to people who have never been to the club - This explains the 60% revenue coming from non-gym members.

Hope this helps.
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I was between B and C. I chose B but realised my mistake later.

Passage says that less than 40% comes from the health club members. Therefore, B is not the right answer.

Hi ameyaprabhu,

Here is my 2 cents

Your thinking regarding to option D: club members might opting to eat at nearby restaurants and NOT at the cafe'.

This "NOT at the cafe'" is AGAINST given fact that club members contribute less than 40% of the revenue of the cafe'.

They do eat at the cafe' and pay bills.

So, whether they like or eat at nearby restaurants or not, they still eat at the cafe' and contribute to its [less than 40%] revenue. So D is irrelevant. D does NOT help to explain.

Another point to add: [Less than] 40% of revenue does NOT mean that [less than] 40% of club members eating at the cafe' and the rest [more than 60%] eating at nearby restaurants. In fact, ALL of club members contribute to that [less than] 40% of revenue.

Hope this helps

it is surprising that less than 40% of the revenue of the café comes from health club members.

It means more than 60% revenue comes from people who are not member of clubs.

C is most appropriate along that line.

The café is most appealing to people who have never been to the club before.

The argument talks about less than 40% of the cafe's revenues coming
from the health club members, where as 80% of the revenue(from gym
entrance fees) comes from the health club members(who have an annual
membership)

Since we need to find out what helps explain the surprising finding regarding the cafe's revenue,
only Option C(the cafe is most appealing to people who have never been to the club before)
gives us a clear reason why the revenue of the cafe is high, even though the health club members do not eat as much.
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This lays an assumption that you have to be an annual member to be part of the Gym. You can come to the GYM for the first time and be an annual member and then goto the Cafe too. In this case, you would still be coming for the first time and still have an annual membership. I think there needs to be an establishment, then the only way you can be part of the GYM is , if you are an Annual member.

At a local health club, almost 80% of the revenue from gym entrance fees comes from annual membership dues. At the café within the health club, it is surprising that less than 40% of the revenue of the café comes from health club members.

Type - Paradox

A. Only people who pay to use the health club are allowed access to the café. - Incorrect - it contradicts the premise .

B. Members with 3 and 6 month memberships use the café much more than annual members do. - Incorrect - it does not explain the frequent usage by non-members

C. The café is most appealing to people who have never been to the club before. - Correct

D. The café only offers a small variety of food items when compared to nearby restaurants. - Irrelevant

E. Members get a 10% discount on food at the café. - Irrelevant - if at all it provides an incentive for members to use the cafe

Answer C
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I thought the same - I thought its either B or C. C seemed too simple but in reality they are talking about all memebers. So C was the only choice that resolved the paradox

At a local health club, almost 80% of the revenue from gym entrance fees comes from annual membership dues. At the café within the health club, it is surprising that less than 40% of the revenue of the café comes from health club members.

Which of the following, if true, best explains the surprising finding regarding the café’s revenues?

A. Only people who pay to use the health club are allowed access to the café.
does not expalin why the cafe make more from other people than members
B. Members with 3 and 6 month memberships use the café much more than annual members do.
no relation or classification of the membership duration
C. The café is most appealing to people who have never been to the club before. correct explaination of why the cafe makes more rpofits from the outsiders than the members
D. The café only offers a small variety of food items when compared to nearby restaurants.other restaurant and the comparison in the menu is out of scope
E. Members get a 10% discount on food at the café.does not expalin anything

this question is unclear b/c "most" in C is quite extreme.
NEvertheless, the OA is acceptable since other option choices are all wrong.
The argument actualy talks about annual membership and other type of membership -> B is out.

VERITAS PREP OFFICIAL SOLUTION:

This “Explain the Paradox” question presents the following paradox: 80% of gym revenue comes from annual membership dues, yet less than 40% of revenue for the café in the gym comes from health club members. In (A), this piece of information actually increases the paradox. One possible explanation for how such a low percentage of revenue at the café could come from members is that many people come for lunch or dinner at the café that are not there to use the health club. If you must be a paying user to use the café, then this explanation is not possible and the paradox is even greater.

For (B), many people will fixate on the fact that the first data point is only about annual memberships – “80% of the revenue comes from annual membership dues” – whereas the second part references all members - “40% of the revenue of the café comes from health club members”. However, if short term members with 3 and 6 month memberships use the café more than annual members do, this does not resolve the paradox. The paradox is how non-members, who account for such a low portion of gym entrance fees at the club, could account for such a high percentage of revenue at the café.

Answer choice (C) gives an explanation for how this discrepancy could be true - if the day pass users who have never been there and who account for only 20% of fees are the ones who find the café appealing, they would account for more of the revenue. This would explain perfectly why the revenue figures at the café do not match the revenue figures for entrance to the gym.

In (D), the variety of food offered at the café would not explain this puzzling data and in (E) if the food is cheaper for members, it actually increases the paradox. The correct answer is (C).
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