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Because production costs are rising, a local theater

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Because production costs are rising, a local theater  [#permalink]

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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.

Originally posted by guerrero25 on 12 Oct 2013, 16:23.
Last edited by hazelnut on 13 Jul 2018, 21:38, edited 4 times in total.
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 10 May 2019, 22:42
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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)
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 12 Oct 2013, 20:54
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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 theatergoers 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.

OA to follow


IMO (B)



(A)The majority of theatergoers are concerned about possible loss of production quality.-Out of scope

(B)Most sponsors will continue to donate the same amount of money per production as they have in the past.-Correct-If the sponsors pay the same amount of money..profit will remain the same

(C)Next year`s production costs are expected to be on average 20% higher for each production.- If production cost is increased and admission fee remains same...the profit will decrease..We don't have to prove that profits will decrease..instead it should not increase (means it can remain the same-narrow scope)-Wrong

(D)Many theater lovers would continue to attend performances regularly even if the admission fee were increased.-If this would have been the case-Increase in admission fee would have resulted in increase in profit... so this actually strengthens the argument

(E)Performers` and technical personnel`s salaries will not change in the near future.-out of scope
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 13 Oct 2013, 10:20
B, If most sponsors contribute the same amount of money per production you have a loss of revenue and possibly profits :-)
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 14 Oct 2013, 22:12
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(A)The majority of theatergoers are concerned about possible loss of production quality.--- Incorrect because The argument mentions that there will be no compromise in the quality.

(B)Most sponsors will continue to donate the same amount of money per production as they have in the past.---- CORRECT, because the sponsors pay per production. For example, if Sponsor A is paying $100 per play and the theater company was conducting 6 plays = $600. But now the number is reduced to half. 3 plays and $100 per play = $300. Reduction in money earned which will result in profit decreasing.

(C)Next year`s production costs are expected to be on average 20% higher for each production.--- Out of scope. What happens to the production costs next year is none of our business.

(D)Many theater lovers would continue to attend performances regularly even if the admission fee were increased. Out of scope. Just gives additional information on what the theater lovers would do even if the admission fees were increased.

(E)Performers` and technical personnel`s salaries will not change in the near future. Out of scope, the salaries will not change does not explain why there will a reduction in profits.
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 17 Jun 2014, 02:23
say there are 100 sponsors and 99 of them continue pay the same there is a chance that the one sponsor may not even pay. This all depends on the amout each sponsor pays.
straight B sponsors
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 24 Feb 2017, 00:35
the answer must be B , as the no. of plays has decreased per person then the donation by sponsor will also decline so instead of rising the profit will decline ultimately, option C is tempting but we are not concerned about the future cost rising as it is already stated that production cost is rising .
hence answer is B
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New post 05 Mar 2017, 22:53
My Reasoning:

(A) The majority of theater goers are concerned about possible loss of production quality. -- Not related to profit

(B) Most sponsors will continue to donate the same amount of money per production as they have in the past. -- Correct. Since it is per production and not bulk amount hence there is no increase in profit even after plays are cut down.

(C)Next year's production costs are expected to be on average 20% higher for each production. -- Does nothing for profit

(D)Many theater lovers would continue to attend performances regularly even if the admission fee were increased. -- That would show that given rest of the parameters remain same, profit will increase. Hence discard.

(E)Performers' and technical personnel's salaries will not change in the near future. -- Need to assume too many things for this option to make an impact

(E)Performers' and technical personnel's salaries will not change in the near future.
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 08 May 2018, 16:52
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(B) Most sponsors will continue to donate the same amount of money per production as they have in the past.
If this is true , they are gng to get less sponsorship. yes this means less profit.
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New post 15 Sep 2018, 08:49
Key word in the answer choice is "per production"
hence if there are less number of plays than the previous year than we will have less amount of money from sponsors

hence option B is the answer
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New post 18 Sep 2018, 05:22
I have a question regarding E, though answer choice B sounds perfect.

E)Performers` and technical personnel`s salaries will not change in the near future.- Consider theaters get some profit out of this, but salaries of performers and personnel remain the same. This will drop down the profit again. Hence this sounds like a weakener.
Correct me if i am wrong.
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 19 Sep 2018, 11:02
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pritaminamdar wrote:
I have a question regarding E, though answer choice B sounds perfect.

E)Performers` and technical personnel`s salaries will not change in the near future.- Consider theaters get some profit out of this, but salaries of performers and personnel remain the same. This will drop down the profit again. Hence this sounds like a weakener.
Correct me if i am wrong.


Even if one assumes that 'theaters would profit out of personnel's salaries' one has to also assume that by decreasing the production cost profit gain would be less than the profit lost in salaries in order to decrease overall profit. And that is a very big assumption to make. Remember the question asks us that in what situation the decrease in production cost would most likely not result in increase in profits. So, option E is not at all a weakener.

Hope this helps!
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New post 09 Nov 2018, 07:07
I do not understand how B is better than C. C states production cost increases by 20%, thus the profits must plummet.
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New post 09 Nov 2018, 08:28
tarunanandani wrote:
pritaminamdar wrote:
I have a question regarding E, though answer choice B sounds perfect.

E)Performers` and technical personnel`s salaries will not change in the near future.- Consider theaters get some profit out of this, but salaries of performers and personnel remain the same. This will drop down the profit again. Hence this sounds like a weakener.
Correct me if i am wrong.


Even if one assumes that 'theaters would profit out of personnel's salaries' one has to also assume that by decreasing the production cost profit gain would be less than the profit lost in salaries in order to decrease overall profit. And that is a very big assumption to make. Remember the question asks us that in what situation the decrease in production cost would most likely not result in increase in profits. So, option E is not at all a weakener.

Hope this helps!


Thanks got your point.



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Because production costs are rising, a local theater  [#permalink]

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New post 13 Dec 2018, 12:09
sriramsundaram91 wrote:
I do not understand how B is better than C. C states production cost increases by 20%, thus the profits must plummet.



sriramsundaram91 in the argument it is already mentioned that Because production costs are rising, so company management knows that costs will rise in the future. So 20% + is not the strongest evidence. C option looks so as if you were changing color of your red Ferrari into dark red. :grin: It doesn't make sense :) Hence B is THE STRONGEST evidence. :)
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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?


(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.
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 10 Feb 2019, 15:20
@varitaskrishma GMATNinja

Can you tell me why E is not a weakener

My understanding- If sal is not reduced, production cost will remain the same hence there won't be an increase in profit.
Although there can be other components of the cost, answer choice B talks about sponsors only.
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Because production costs are rising, a local theater  [#permalink]

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New post 10 Feb 2019, 18:22
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KaranB1 wrote:
@varitaskrishma GMATNinja

Can you tell me why E is not a weakener

My understanding- If sal is not reduced, production cost will remain the same hence there won't be an increase in profit.
Although there can be other components of the cost, answer choice B talks about sponsors only.

Notice what the passage says about how the company plans to reduce costs.

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.

So, the point is that the company will not be producing as many DIFFERENT PLAYS. So, by reducing the number of different plays it produces, the company plans to spend less, because there are costs associated with producing each play.

Key to answering CR questions is noticing key details, and, in this case, that the plan is to reduce the number of different plays is a key detail that you have to notice.

Notice what else the passage says.

The quality of performances, their frequency, and the admission price will not change.

Notice that passage says that the frequency of the performances won't change, in other words, that the company plans to have just as many performances as they have had in the past. Accordingly, it seems likely that actors will be working just as much as they have in the past. So, there is no reason to believe that the actors would get paid less. Thus, from what the passage says, the only costs that the company expects to reduce are those associated with producing each unique play.

Now, let's consider E.

(E)Performers` and technical personnel`s salaries will not change in the near future.

(E) is a trap choice, because a test-taker could be tempted to pick (E) by the fact that (E) seems to indicate that costs won't decrease.

At the same time, (E) is clearly incorrect, because it tells us nothing really new. The company's plan is not to reduce costs overall. The plan is to reduce production costs by reducing the number of different plays the company produces, and the fact that the salaries of actors and technical personnel will not change does not affect the success of that plan.

In fact, in a way, (E) strengthens the argument by indicating that these salaries will not change, because if salaries will not change, THEY WON'T INCREASE. So, the fact that salaries will not change adds support to the conclusion that, by reducing the number of plays that the company produces, the company will increase profits.

Now, armed with this information, you could consider (B) again, and I believe that you will see why it is correct.
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 09 May 2019, 14:52
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.


VeritasKarishma GMATNinja generis chetan2u

Can you please explain this question ? I am finding it difficult to eliminate C and choose B instead ....
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Re: Because production costs are rising, a local theater  [#permalink]

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New post 11 May 2019, 05:18
pritaminamdar wrote:
I have a question regarding E, though answer choice B sounds perfect.

E)Performers` and technical personnel`s salaries will not change in the near future.- Consider theaters get some profit out of this, but salaries of performers and personnel remain the same. This will drop down the profit again. Hence this sounds like a weakener.
Correct me if i am wrong.



It strengthens the argument by indicating that these salaries will not change, because if salaries will not change, THEY WON'T INCREASE. So, the fact that salaries will not change adds support to the conclusion that, by reducing the number of plays that the company produces, the company will increase profits.
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Re: Because production costs are rising, a local theater   [#permalink] 11 May 2019, 05:18
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