The Smithtown Theatre, Which Stages Old Plays, has Announced an Expansion that will Double its Capacity Along with its Operating Costs

Question: The Smithtown Theatre, which stages old plays, has announced an expansion that will double its capacity along with its operating costs. The theatre is only slightly profitable at present. In addition, all of the current customers live in Smithtown, and the population of the town is not expected to increase in the next several years. Thus, the expansion of the Smithtown Theatre will prove unprofitable.

Which of the following, if true, would most seriously weaken the argument?

(A) A large movie chain plans to open a new multiplex location in Smithtown later this year.
(B) Concession sales in the Smithtown Theatre comprise a substantial proportion of the theatre's revenues.
(C) Many recent arrivals to Smithtown are students that are less likely to attend the Smithtown Theatre than are older residents.
(D) The expansion would allow the Smithtown Theatre to stage larger, more popular shows that will attract customers from neighboring towns.
(E) The Board of the Smithtown Theatre often solicits input from residents of the town when choosing which shows to stage.

The Smithtown Theatre, which stages old plays, has announced an expansion that will double its capacity along with its operating costs - is a GMAT Critical question. This particular GMAT Critical Reasoning topic has been taken from the book ‘Manhattan Prep GMAT Critical Reasoning 6th Edition’. This particular topic is the Assumption and conclusion type of question. For this type, the candidates need to provide an assumption which supports the conclusion provided in the passage. GMAT critical reasoning tests the logical and analytical skills of the candidates. Critical reasoning in GMAT requires candidates to find the strengths and weaknesses of the argument, or find the logical flaw in the argument. The GMAT CR section contains 10 -13 GMAT critical reasoning questions out of 36 GMAT verbal questions.

Answer: D
Explanation:

A GMAT Critical Reasoning section comprises some facts and statements. GMAT critical reasoning tests the reasoning, logical and analytical thinking abilities of the candidate. The candidate has to deduce the correct option by finding the logically correct argument or by eliminating the irrelevant arguments.

The statement states -The Smithtown Theatre, which stages old plays, has announced an expansion that will double its capacity along with its operating costs. The theatre is only slightly profitable at present. In addition, all of the current customers live in Smithtown, and the population of the town is not expected to increase in the next several years. Thus, the expansion of the Smithtown Theatre will prove unprofitable.

Which of the following, if true, would most seriously weaken the argument?

(A) Incorrect. This strengthens the conclusion. Since, when a competitor opens up, your existing customers might be drifted away from your shop. This could result into lower revenue (and thus lower profits). Thus it strengthens the fact that Smith Theatre would be profitable.

(B) Incorrect. It is irrelevant argument. This has no relevance to the question.

(C) Incorrect. This doesn't weaken at all, as this does not increase profitability of Smith Theatre.

(D) Correct. Adds up customers => More revenues => weakens the unprofitability of Smith Theatre.

(E) Incorrect. How does it translate into increased profits? May be residents don't care about the content of the show, they would go/not go to watch irrespective of good play.

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