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Resolve the Paradox—#%. The correct answer choice is (B)
This stimulus presents a fairly simple paradox regarding the movie industry: big budget movies often gross double or triple their costs, yet the majority of the movie industry’s total revenue comes from smaller budget movies. The correct answer choice will be consistent with both these facts.
Answer choice (A): This answer choice may look tempting, unless we consider the fact that we’re dealing with the industry’s revenues, not profits, so the requirements to recoup production costs are irrelevant.
Answer choice (B): This is the correct answer choice, as it helps to resolve the paradox from the stimulus. How can it be that big budget movies can often make big profits, yet make up a minority of the industry’s revenues? There are more low-budget movies made, so each one doesn’t have to be as successful as the big-budget blockbusters.
Answer choice (C): Such a decline in the industry overall does not help to explain the discrepancy between the huge revenues of big-budget movies, and the fact that those movies nonetheless contribute a minority of the industry’s overall revenues.
Answer choice (D): This answer choice is wrong for the same reason as answer choice (A) above. Since we’re discussing revenues, higher costs for the big-budget movies would not come into play in resolving the paradox from the stimulus, and this choice cannot be correct.
Answer choice (E): This answer is incorrect for the same reason as answer choices (A) and (D) above: the expense associated with making a movie does not have any effect on the revenues earned by the movie, so this answer choice fails to resolve the discrepancy in the stimulus.