guerrero25 wrote:
Because production costs are rising, a local theater company is planning to maximize its profits by reducing by half the number of plays it stages per season. The quality of performances, their frequency, and the admission price will not change. Furthermore, neither the audience nor the sponsors, an important source of theater funding, is expected to be lost if the plan is instituted.
Which of the following, if true, provides the strongest evidence that the theater's profits are not likely to increase if the plan is instituted?
(A) The majority of theatre goers are concerned about possible loss of production quality.
(B) Most sponsors will continue to donate the same amount of money per production as they have in the past.
(C) Next year's production costs are expected to be on average 20% higher for each production.
(D) Many theater lovers would continue to attend performances regularly even if the admission fee were increased.
(E) Performers' and technical personnel's salaries will not change in the near future.
Production costs are rising.
So reduce number of plays produced per season to maximise profit (lower cost)
Audience and sponsors will not be lost.
Quality, frequency of plays produced and price will not change.
So this is what the argument says - Say currently 10 plays are produced and played during the season (say three months July-Aug-Sept). From now on, only 6 will be produced and played throughout the season. So cost will decrease. In this way, profit is expected to be maximised. Audience and sponsors are expected to stick around.
Which of the following weakens the plan?
(A) The majority of theatre goers are concerned about possible loss of production quality.
Quality will stay the same and theatre goers are expected to not be lost. Any concerns they might have will not impact the plan.
(B) Most sponsors will continue to donate the same amount of money per production as they have in the past.
Here is the twist - most sponsors will donate the same amount PER PRODUCTION. So if they were paying $1000 per production, and hence were paying $10k before, they will not pay only $6k. So though sponsors will not be lost, fewer productions will reduce overall revenue from them. This weakens our plan.
(C) Next year's production costs are expected to be on average 20% higher for each production.
We already know that production costs ARE RISING. Next year costs are expected to be higher. The plan has been made accordingly. It does not weaken our plan.
(D) Many theater lovers would continue to attend performances regularly even if the admission fee were increased.
Irrelevant. Fees will stay the same. What happens if it is increased is irrelevant.
(E) Performers' and technical personnel's salaries will not change in the near future.
It doesn't weaken our plan. This means cost of playing will not increase.
Answer (B)