Background information: This year, each film submitted to the Barbizon

Chitra657

The example you have taken is incorrect. This is what is given to us.

Fact II : The overall rate of acceptance of domestic films was significantly higher than that of foreign films.

So both cannot have an overall acceptance rate of 50%. So this data you have given is not acceptable:
Lets say there are 100 Domestic films and 50 foreign films. And 50 domestic got selected and 25 foreign ones got selected. This gives an overall acceptance rate of 50% for both.

Say there are 100 domestic films and 50 foreign films. They are put in 10 categories say animation, drama, romantic comedy etc.
In each category, the acceptance rate is the same for both kind of films. But acceptance rate of each category may not be the same as acceptance rate of another category.

So say animation has 10 domestic and 2 foreign films. Then if 5 domestic are accepted, then 1 foreign will be accepted. (rate of 50% for both)
Say drama has 20 domestic and 5 foreign films. Then if 4 domestic are accepted, 1 foreign will be accepted (20% acceptance rate for both)
etc

Overall acceptance rate of domestic films is much higher than that of foreign films. How is that possible? Overall acceptance rate will be the weighted average of the acceptance rates of the 10 categories. If many domestic films are put in the category in which acceptance rates are high, its average will lean towards the higher end and hence its acceptance rate will be higher.

This leads us to option (E).

At the core, the problem is a weighted average problem.
ashmit99