Understanding the argument -
This is a really good question, and as mikemcgarry has beautifully pointed out, this question is based on a Simpson's Paradox. It has real-life implications, so you better understand it at some point in your life as a business leader. This may become handy.
One recent real-life example was during COVID-19.
Overall situation - One report highlighted that the unvaccinated people live longer than the vaccinated people. But when you dig into each age bracket, the SAME data proves that vaccinated are better off than unvaccinated. Then why contradictory results? Simpson's Paradox. The reason is that every government prioritized vaccinating older age people whose lifespan after getting vaccination is naturally lower than, for example, 20 years old.
Another situation - Italy, as you remember, for a certain period of time, had a bad Case Fatality Rate as compared to China (Overall). Still, when the researchers looked into each age bracket for SAME data, Italy was better off than China in every age bracket. Then why contradictory results? Because of Simpson's Paradox. The reason is that Italy had a much higher number of people in the older category than China, and that was responsible for these paradoxical results.
So, one lesson we can learn as leaders from this equation is that if something seems weird, don't just act on it. Get into details. Maybe the reality is 100% opposite. This is true of 100% of the cases with Simpson's Paradox.
Now back to our question. This is more of a Data Sufficiency wherein we need to choose the common scenario, which is true all the time.
Scenario 1 Drama Comedy Overall Overall %ages
Foreign 20/2000 200/200 220/2200 10%
Domestic 20/200 1000/1000 1020/1200 85.00%
Options B and E are correct
Option B is correct Drama Comedy
Proposition of Foreign Films 91% 9%
Proposition of Domestic Films 17% 83%
Option E is correct as well.
Scenario 2 Drama Comedy Overall Overall %ages
Foreign 20/2000 1800/1800 1820/3800 48%
Domestic 20/200 10000/10000 10020/10200 98.24%
Option B and D are correct
Option B is correct Drama Comedy
Proposition of Foreign Films 53% 47%
Proposition of Domestic Films 2% 98%
Option D is correct as well.
A common option Among both Scenarios is option B.
To be considered for inclusion in the Barbizon Film Festival, a film must belong either to the category of drama or of comedy. - Two categories - Drama/Comedy
Drama always receives more submissions but has a lower acceptance rate than comedy. All of the films are either foreign or domestic. This year, the overall acceptance rate for domestic films was significantly higher than that for foreign films. Within each category, drama and comedy, however, the acceptance rate for domestic films was the same as that for foreign films.
Option Elimination -
A. significantly fewer foreign films than domestic films were accepted - No.
B. a higher proportion of the foreign than of the domestic films submitted were submitted as dramas - ok
C. the rate of acceptance of foreign films submitted was the same for dramas as it was for comedies - No.
D. the majority of the domestic films submitted were submitted as comedies - May be or may not be. Usually, it might be true is a false category on Inference. As we saw, we can't have this in 100% of the scenarios as per the argument.
E. the majority of the foreign films submitted were submitted as dramas - May be or may not be. Usually, it might be true is a false category on Inference. As we saw, we can't have this in 100% of the scenarios as per the argument.
Is this question worth a 2-minute time on the GMAT? Not sure

. But does it have real-world implications? Absolutely.