Independent concert promoters, in order to maintain their credibility

Question

Competition Mode Question

Independent concert promoters, in order to maintain their credibility and compete with larger, publicly traded promoters, must represent the concert tours of well-known artists. To attract such business, these private companies have had to increase their guaranteed payments to famous clients. To offset these increases, smaller promoters have raised their ticket prices, resulting in low attendance at a number of recent shows.

Which of the following assertions is best drawn from the information above?

A. Independent concert promoters often lose money by representing well-known artists.

B. The largest independent concert promoter has fewer employees than the smallest publicly traded promoter.

C. Ticket price is the most important determining factor for concert attendance.

D. Future ticket prices for well-known artists will continue to increase.

E. The contracts between concert promoters and artists are not always based solely on revenue generated by ticket sales.

eakabuah · Accepted Answer

The answer is E in my view.

Premise: Independent concert promoters must represent the concert tours of well-known artists in order to maintain their credibility and compete with larger, publicly traded promoters.
Premise: These private companies (Independent concert promoters) have had to increase their guaranteed payments to famous clients (well-known artists) to attract such business.
Premise: Smaller promoters have raised their ticket prices, resulting in low attendance at a number of recent shows in order to offset these increases (guaranteed payments).

A. Independent concert promoters often lose money by representing well-known artists. This is not necessarily true per the information provided above. Independent concert promoters have had to increase their guaranteed payments to famous clients. In addition, they have raised their ticket prices resulting in low attendance. These actions could lead to loss of money or maybe not. Hence we can't infer A from the information provided above.

B. The largest independent concert promoter has fewer employees than the smallest publicly traded promoter. This is incorrect and entirely out of scope as far as the information provided above is concerned.

C. Ticket price is the most important determining factor for concert attendance. This is not necessarily true. Increased ticket prices have resulted in low attendance at a number of recent shows, does not mean that it has resulted in low attendance in all recent shows. So, there is a possibility that there are shows with high ticket prices that had high patronage.

D. Future ticket prices for well-known artists will continue to increase. Not necessarily. The ticket price is only increased to offset the guaranteed payments to well-known artists. This does not mean that future ticket prices for well-known artists will automatically increase. If the guaranteed payments remain the same, there would be no justification for an increase in ticket price.

E. The contracts between concert promoters and artists are not always based solely on revenue generated by ticket sales. This is the only one left and the language is not extreme. This is true. The contracts are also based on guaranteed payments per the information provided above. The information specifically states that independent promoters have had to increase their guaranteed payments to well-known artists, hence, guaranteed payments is included among other things that contracts between concert promoters and artists contain.

PTD1995 · Answer

A) Out of Scope

B) Out of Scope

C) Interesting, but incorrect. We cannot ascertain whether price is the  most  important factor; only that is a factor

D) Not related

E) Correct

Archit3110 · Answer

conclusion:To attract such business, these private companies have had to increase their guaranteed payments to famous clients. To offset these increases, smaller promoters have raised their ticket prices, resulting in low attendance at a number of recent shows.
IMO A: 
Independent concert promoters often lose money by representing well-known artists.

Independent concert promoters, in order to maintain their credibility and compete with larger, publicly traded promoters, must represent the concert tours of well-known artists. To attract such business, these private companies have had to increase their guaranteed payments to famous clients. To offset these increases, smaller promoters have raised their ticket prices, resulting in low attendance at a number of recent shows.

Which of the following assertions is best drawn from the information above?

A. Independent concert promoters often lose money by representing well-known artists.

B. The largest independent concert promoter has fewer employees than the smallest publicly traded promoter.

C. Ticket price is the most important determining factor for concert attendance.

D. Future ticket prices for well-known artists will continue to increase.

E. The contracts between concert promoters and artists are not always based solely on revenue generated by ticket sales.

neharaj0001 · Answer

E is the correct answer, cause it best addresses the fact that fixed artist payment leads to increased price of the ticket .

Posted from my mobile device

GMATmona07 · Answer

Hi experts,
Will you please enlighten, why E is correct here?
I didn't find any option that can be inferred from the given argument.

Thanks

shubhim20 · Answer

exactly please help understand this  Bunuel   KarishmaB

KarishmaB · Answer

(E) is correct. The argument tells you that the contracts promised higher  guaranteed payments to famous clients because of reasons of their own (to maintain credibility etc)

Hence the contract was not based solely on revenue generated by ticket sales.

So the argument gives you an instance of when the 'contract was not based solely on revenue generated by ticket sales'. Hence option (E) is correct.

Independent concert promoters, in order to maintain their credibility

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

Independent concert promoters, in order to maintain their credibility

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards