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# Teresa: If their goal is to maximize profits, film studios should conc

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Teresa: If their goal is to maximize profits, film studios should conc  [#permalink]

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16 Feb 2020, 17:18
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59% (01:50) correct 41% (01:50) wrong based on 170 sessions

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Teresa: If their goal is to maximize profits, film studios should concentrate on producing big-budget films rather than small-budget ones. For, unlike big-budget films, small-budget films never attract mass audiences. While small-budget films are less expensive to produce and, hence, involve less risk of unprofitability than big-budget films, low production costs do not guarantee the highest possible profits.

Which one of the following is an assumption required by Teresa’s argument?

(A) Each big-budget film is guaranteed to attract a mass audience.
(B) A film studio cannot make both big-budget films and small-budget films.
(C) A film studio will not maximize its profits unless at least some of its films attract mass audiences.
(D) It is impossible to produce a big-budget film in a financially efficient manner.
(E) A film studio’s primary goal should be to maximize profits.

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Teresa: If their goal is to maximize profits, film studios should conc  [#permalink]

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16 Feb 2020, 19:45
Here ans A is wrong because it is not necessary for Each big-budget film to attract a mass audience
Even if some big-budget films fail, profit can be maximized if most films attract mass audience
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Re: Teresa: If their goal is to maximize profits, film studios should conc  [#permalink]

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18 Feb 2020, 04:07
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Teresa: If their goal is to maximize profits, film studios should concentrate on producing big-budget films rather than small-budget ones. For, unlike big-budget films, small-budget films never attract mass audiences. While small-budget films are less expensive to produce and, hence, involve less risk of unprofitability than big-budget films, low production costs do not guarantee the highest possible profits.

Big-budget films vs Small-budget films.
Big Budget films = Mass Audience unlike Small budget films
Small budget films = less risk of unprofitably but no guarantee of Highest possible profit.
Conclusion: In order to maximize the profits film studios should make big budget films.

Which one of the following is an assumption required by Teresa’s argument?

(A) Each big-budget film is guaranteed to attract a mass audience.
Wrong. "Guaranteed" is an extreme word. Maybe without mass audience, by just hiking the price of tickets can bring profits.

(B) A film studio cannot make both big-budget films and small-budget films.
Wrong. The premise says that film studio that are making small budget films should make big budget films also.

(C) A film studio will not maximize its profits unless at least some of its films attract mass audiences.
Right. Big budget films = mass audience = highest profitability

(D) It is impossible to produce a big-budget film in a financially efficient manner.
Wrong. We are not talking about financially efficient manner in the premise.

(E) A film studio’s primary goal should be to maximize profits.
Wrong. A film's studio primary goal also can be to establish their name by attracting mass audience and thereby creating profits.
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Teresa: If their goal is to maximize profits, film studios should conc  [#permalink]

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23 Mar 2020, 17:20
Akela wrote:
Teresa: If their goal is to maximize profits, film studios should concentrate on producing big-budget films rather than small-budget ones. For, unlike big-budget films, small-budget films never attract mass audiences. While small-budget films are less expensive to produce and, hence, involve less risk of unprofitability than big-budget films, low production costs do not guarantee the highest possible profits.

Which one of the following is an assumption required by Teresa’s argument?

(A) Each big-budget film is guaranteed to attract a mass audience.
(B) A film studio cannot make both big-budget films and small-budget films.
(C) A film studio will not maximize its profits unless at least some of its films attract mass audiences.
(D) It is impossible to produce a big-budget film in a financially efficient manner.
(E) A film studio’s primary goal should be to maximize profits.

Good question.
Conclusion: IF their goal is to maximize profits, film studios SHOULD concentrate on producing big-budget films rather than small-budget ones
Why? Because unlike big-budget films, small-budget films never attract mass audiences.
Goal: Find the Assumption, some thing that MUST be true so that the conclusion holds and appropriately connects profit maximization and the ability of big-budget films to attract mass-audiences

(A) Each big-budget film is guaranteed to attract a mass audience
A classic trap. (A) definitely STRENGTHENS the conclusion but is NOT NECESSARY. Even if NOT ALL big-budget films attract mass audiences, the conclusion does not break down: maybe 99% of them attract mass audiences, and they help maximize profits more than small-budget films do. The argument says "UNLIKE big-budget films, small-budget films NEVER attract mass audiences. This does not mean that big-budget films attract mass audiences ALL THE TIME: they can successfully do that some times or most of the times. Also, (A) does not connect the profit maximization and ability of big-budget films to attract mass audiences. Eliminate (A).

(B) A film studio cannot make both big-budget films and small-budget films.
Negation of (B): A film studio CAN make both big-budget films and small-budget films. If so, a film studio CAN concentrate on making big-budget films to maximize profits. No problem. Eliminate (B).

(C) A film studio will not maximize its profits unless at least some of its films attract mass audiences.
Negation of (C): A film studio will not maximize its profits unless NONE of its films attract mass audiences. If so, making big-budget films to attract mass audiences does not help maximize profits. This breaks the Conclusion. (C) is necessary. Keep (C).

(D) It is impossible to produce a big-budget film in a financially efficient manner.
Negation of (D): It is possible to produce a big-budget film in a financially efficient manner. This does not break the conclusion and even somewhat strengthen it. Eliminate (D).

(E) A film studio’s primary goal should be to maximize profits.[/quote]
The Conclusion contains the Condition "IF their goal is to maximize profits, ...". The Condition is GIVEN, so whether a film studio’s primary goal should be to maximize profits, we don't care. Negation of (E) also does not break the conclusion because of the given Condition within the Conclusion. Eliminate (E).

(C) is correct.
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Teresa: If their goal is to maximize profits, film studios should conc   [#permalink] 23 Mar 2020, 17:20
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