Box office receipts at movie theaters increased 40 percent last year over the previous year. Thus, the film industry overall evidently is prospering. Yet twice as many movie theaters went bankrupt last year as in the preceding two years combined.
Which one of the following, if true, most helps to resolve the apparent discrepancy in the information above?The apparent contradiction is that total box office receipts increased sharply, suggesting prosperity, but many more theaters went bankrupt.
The resolution should show how total receipts could rise while
many individual theaters still suffered financially.
(A) Films cost, on average, twice as much to produce today as they did ten years ago.
Wrong. Higher production costs may affect film producers, but the paradox is about movie theaters going bankrupt despite higher theater receipts.
(B) Ticket prices at some theaters fell last year.
Wrong. This could explain lower receipts at some theaters, but it does not explain why overall box office receipts rose 40 percent.
(C) Those of last year's films that were successful were very profitable films that were shown by exclusive engagement at only a selection of the largest theaters.
Correct. This explains both facts. A few large theaters could have earned huge receipts from successful exclusive films, raising total box office receipts, while many smaller theaters lost business and went bankrupt.
(C) The amount of money spent on film advertising increased greatly last year over the year before, and the majority of this expense was absorbed by the producers and the distributors of films, not by the theater owners.
Wrong. If theater owners did not absorb most of the advertising cost, this does not explain why many theaters went bankrupt.
(E) In general, an increase in a theater's box office receipts for any year is accompanied by an increase in that theater's profits from snack-food and soft-drink sales for that year.
Wrong. This makes the discrepancy stronger, because it suggests theaters with higher receipts should also have higher concession profits.
Answer: (C)