medium · GMAT Verbal
To increase revenue, a struggling cinema chain plans to reduce the price of its popcorn and sodas by 50%. The management believes that the lower prices will attract more customers who would have otherwise avoided the high cost of concessions, thereby increasing total profit.
Which of the following, if true, most weakens the management's reasoning?
- Stable kernel and syrup costs over the recent three years mean the chain can readily sustain the new 50% concession price cut.
- Cinemas in several neighboring towns that lowered their own concession prices saw total concession revenue climb sharply the following quarter.
- Purchase records show that existing customers would buy essentially the same number of concession items at either price, while the expected new attendance is far too small to double total unit sales.
- The cinema chain recently renovated several of its largest theaters to add comfortable new reclining seats and a fresh lobby this season.
- Many moviegoers choose which cinema to attend based largely on the quality of the projection and sound systems rather than the price of snacks.
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