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505-555 (Easy)|   Strengthen|            
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KarishmaB

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In Washington County, attendance at the movies is just large enough for the cinema operators to make modest profits. The size of the county's population is stable and is not expected to increase much. Yet there are investors ready to double the number of movie screens in the county within five years, and they are predicting solid profits both for themselves and for the established cinema operators.

Which of the following, if true about Washington County, most helps to provide a justification for the investors' prediction?

(A) Over the next ten years, people in their teenage years, the prime moviegoing age, will be a rapidly growing proportion of the county's population.

(B) As distinct from the existing cinemas, most of the cinemas being planned would be located in downtown areas, in hopes of stimulating an economic revitalization of those areas.

(C) Spending on video purchases, as well as spending on video rentals, has been increasing modestly each year for the past ten years.

(D) The average number of screens per cinema is lower among existing cinemas than it is among cinemas still in the planning stages.

(E) The sale of snacks and drinks in cinemas accounts for a steadily growing share of most cinema operators' profits.
Cinema operators will modest profits today.
Population is stable and expected to be stable (say 100k people).
Investors want to build many new screens - predicting solid profits for new and existing owners.

What will justify this prediction? Currently the profits are modest. They are expected to be solid even after number of screens are doubled?
Obviously, the expectation is a big increase in the number of movie goers and/or a major lifestyle change of current moviegoers so that they start watching many more movies.


(A) Over the next ten years, people in their teenage years, the prime moviegoing age, will be a rapidly growing proportion of the county's population.

So it seems there are many kids in the 5 - 12 age range and over the next ten years (from now to 10 years later), they will become teenagers. That is when people go for movies. If teenagers will be a rapidly growing proportion of population, a big proportion of the population will be watching movies. So though the population will not increase, the proportion of population that watches movies will increase rapidly. This explains what solid profits could be expected.

(B) As distinct from the existing cinemas, most of the cinemas being planned would be located in downtown areas, in hopes of stimulating an economic revitalization of those areas.

This talks about cinemas boosting economy. We need to find why we are expecting cinemas to get a boost. We want to find what will make people come to cinemas. If they do, how that impacts the economy and of what areas is irrelevant.

(C) Spending on video purchases, as well as spending on video rentals, has been increasing modestly each year for the past ten years.

Doesn't explain why people will start going to cinemas soon.

(D) The average number of screens per cinema is lower among existing cinemas than it is among cinemas still in the planning stages.

No of screens per cinema is irrelevant. We are planning to double the number of screens. How many cinemas will they be in, we don't care.

(E) The sale of snacks and drinks in cinemas accounts for a steadily growing share of most cinema operators' profits.

"Steadily growing share of profits" - Ignore.

Answer (A)
­
Hi KarishmaB

Could you explain why option D is not correct? I am still not clear.
My thinking is - with the current level of population, it could be possible that due to limited screens per cinema, cinemas have reached the ceiling to accommodate people coming to watch movies, for ex: an existing cinema house has 1 screen and it can only take 500 per screen where 800 people showed up. As the population is expected to remain largely the same, more screens per cinema will help accommodate all movie enthusiasts.

Also, can we say that option D is a mild weakener given the above reasoning and A is a strong weakener, hence, A won ultimately?

If A is not even a mild weakener then is it the case that investors worry about all cinemas together at a macro level instead of micro (like above) and doubling the screens in 5 years makes them comfortable about profits? Please let me know if I thought in the right direction on this.
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KarishmaB

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In Washington County, attendance at the movies is just large enough for the cinema operators to make modest profits. The size of the county's population is stable and is not expected to increase much. Yet there are investors ready to double the number of movie screens in the county within five years, and they are predicting solid profits both for themselves and for the established cinema operators.

Which of the following, if true about Washington County, most helps to provide a justification for the investors' prediction?

(A) Over the next ten years, people in their teenage years, the prime moviegoing age, will be a rapidly growing proportion of the county's population.

(B) As distinct from the existing cinemas, most of the cinemas being planned would be located in downtown areas, in hopes of stimulating an economic revitalization of those areas.

(C) Spending on video purchases, as well as spending on video rentals, has been increasing modestly each year for the past ten years.

(D) The average number of screens per cinema is lower among existing cinemas than it is among cinemas still in the planning stages.

(E) The sale of snacks and drinks in cinemas accounts for a steadily growing share of most cinema operators' profits.
Cinema operators will modest profits today.
Population is stable and expected to be stable (say 100k people).
Investors want to build many new screens - predicting solid profits for new and existing owners.

What will justify this prediction? Currently the profits are modest. They are expected to be solid even after number of screens are doubled?
Obviously, the expectation is a big increase in the number of movie goers and/or a major lifestyle change of current moviegoers so that they start watching many more movies.


(A) Over the next ten years, people in their teenage years, the prime moviegoing age, will be a rapidly growing proportion of the county's population.

So it seems there are many kids in the 5 - 12 age range and over the next ten years (from now to 10 years later), they will become teenagers. That is when people go for movies. If teenagers will be a rapidly growing proportion of population, a big proportion of the population will be watching movies. So though the population will not increase, the proportion of population that watches movies will increase rapidly. This explains what solid profits could be expected.

(B) As distinct from the existing cinemas, most of the cinemas being planned would be located in downtown areas, in hopes of stimulating an economic revitalization of those areas.

This talks about cinemas boosting economy. We need to find why we are expecting cinemas to get a boost. We want to find what will make people come to cinemas. If they do, how that impacts the economy and of what areas is irrelevant.

(C) Spending on video purchases, as well as spending on video rentals, has been increasing modestly each year for the past ten years.

Doesn't explain why people will start going to cinemas soon.

(D) The average number of screens per cinema is lower among existing cinemas than it is among cinemas still in the planning stages.

No of screens per cinema is irrelevant. We are planning to double the number of screens. How many cinemas will they be in, we don't care.

(E) The sale of snacks and drinks in cinemas accounts for a steadily growing share of most cinema operators' profits.

"Steadily growing share of profits" - Ignore.

Answer (A)
­
Hi KarishmaB

Could you explain why option D is not correct? I am still not clear.
My thinking is - with the current level of population, it could be possible that due to limited screens per cinema, cinemas have reached the ceiling to accommodate people coming to watch movies, for ex: an existing cinema house has 1 screen and it can only take 500 per screen where 800 people showed up. As the population is expected to remain largely the same, more screens per cinema will help accommodate all movie enthusiasts.

Also, can we say that option D is a mild weakener given the above reasoning and A is a strong weakener, hence, A won ultimately?

If A is not even a mild weakener then is it the case that investors worry about all cinemas together at a macro level instead of micro (like above) and doubling the screens in 5 years makes them comfortable about profits? Please let me know if I thought in the right direction on this.
­Number of screens is the only measure of interest to us, not number of cinemas. 
Consider 4 standalone theatres with single screens. Then consider a PVR with 4 screens inside it. The PVR is equivalent to the 4 theatres.
Typically, each screen will accomodate a fixed number of people. It will have a typical size and say 200 people can sit in front of one screen. So what is relevant is how many screens are there in the country and how many will be there. How many cinemas there are is of no consequence. I could set up 4 single screen theatres and accomodate 800 people or 1 PVR with 4 screens and still accomodate 800 people. 
The point is how many total screens there are.

The plan is to double them. So if there were 100 screens in the country, the point is to make them 200 screens by adding another 100. Now whether we open 100 stand alone theatres or 25 PVRs is irrelevant. The capacity remains the same. Does it matter then that right now there are more single screen theatres and going forward there will be more PVRs? No. 
Hence (D) is absolutely irrelevant. 

(A) makes sense and strengthens that movie going public will increase because the % of teenager population is going to increase. 
Currently if there are 100 people in the country and 20 of them are teenagers, in 10 years we will still have 100 people (as given) but 40 of them will be teenagers - higher % will be teenagers (birth rates could have increased substantially in the last few years but death rates may also have increased to keep population constant). 
Hence, we will have more movie going public. 
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