PrepTest 125, Section 4, Question 18
Teresa: If their goal is to maximize profits,(50 more words not shown)
Which one of the following(7 more words not shown)
- AEach big-budget film(7 more words not shown)
- BA film studio(8 more words not shown)
- CA film studio(15 more words not shown)
- DIt is impossible(10 more words not shown)
- EA film studio's(7 more words not shown)
Reading the argument
A bigger audience can bring in more money. But how much did the movie cost to make?
Teresa's recommendation concerns maximizing profits, not merely selling lots of tickets. She accepts that small-budget films cost less and involve less risk of losing money. She replies that low costs don't guarantee the highest profits. Fair enough—but that alone doesn't establish that concentrating on expensive films is the best strategy.
What if a studio makes a large number of inexpensive films? Each could attract a modest audience and contribute a small profit. The combined profit might compete with what the studio could earn from a few expensive films. We must respect the premise that small-budget films never attract mass audiences; the alternative needs to work without giving them mass audiences.
For a made-up comparison, a film costing $500 million and bringing in $750 million earns $250 million before any other costs we might need to consider. A hundred smaller films would need an average profit of $2.5 million each to match that total. These aren't industry figures. They show why we need to consider costs and the studio's whole set of films, not just the size of one movie's audience.
What we’re looking for
For the required-assumption question, I'd look for something Teresa needs in order to rule out a successful small-budget strategy. Her recommendation depends on the large-audience advantage doing work that a high volume of smaller films couldn't replace.
Working the answers
- A
A recommended strategy doesn't require every film made under it to succeed. Some big-budget films could fail to attract mass audiences while Teresa still thought concentrating on that category offered the greatest total profit. A guarantee for each individual film is stronger than the argument needs.
- B
'Concentrate on' doesn't mean 'make exclusively.' A studio could focus most of its effort on big-budget films and still make some small-budget films. Teresa doesn't have to assume that a mixture is impossible to recommend emphasizing one category.
- CCorrect
At least some films must attract mass audiences for the studio to maximize profits. This expresses the audience requirement behind Teresa's reasoning more directly than my initial thought about a volume strategy.
If a studio could maximize profits without any mass audiences, then small-budget films' inability to attract them wouldn't establish the need to focus on big-budget films. That missing necessity is what C supplies. It doesn't guarantee that every big-budget film succeeds or that audience size is the only thing affecting profit.
- D
Expensive doesn't mean financially inefficient. A large production could use its budget carefully, even though the total cost is high. Teresa doesn't need big-budget films to be impossible to produce efficiently. That would hardly explain why focusing on them is a good route to profit.
- E
Teresa begins with 'if their goal is to maximize profits.' She tells studios what to do under that goal; she doesn't say it should be their primary goal. A studio might put artistic work or some other purpose first. The argument doesn't need to settle what studios ought to value most.
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