I went with answer C, even though I think people get tripped because of an unstated assumption of the argument.
Premise 1: There is a higher concentration of active listeners in the mountains (as a % of population).
Premise 2: There is a higher concentration of passive listeners on the coasts (as a % of population).
Unstated Premise: Active listeners are a "better" category of listeners (whatever that means).-----------------------
Conclusion: Record labels should focus on active listeners.
Answer A: Less pubs means less "passive" listening, therefore it goes against our recommendation of focusing on active listeners.
Answer B: While consuming music in both ways is possible, we don't know the proportion of people doing this type of listening.
Answer C: Assuming a higher population on coastal states compared to mountainside, even if we have a smaller % of active listeners in the general public, numerically they could be more people than in the mountain regions. The author fails to recognize that by focusing on coastal states we could have a higher public of active listeners.
Answer D: Misses the point entirely, we don't talk about sales, we talk about marketing.
Answer E: Same as D.
When I read the argument and the question, I was expecting the correct answer to go against the unstated assumption, something like "the active listeners are NOT a better category of listeners than passive ones". I think many candidates fall in this trap of internalizing an answer of their own and panicking when it's not present in the options, but I think it's possible to overcome it by understanding the link between premises and conclusion before attacking the answer choices.