@Richmond this is a paradox question, so you're looking for the answer that would reconcile the seeming paradox.
The paradox in the question is that by lowering ticket prices, an airline can increase ticket sales but would end up actually losing money in the process. You're looking for an answer that would explain both sides of this phenomenon. There's really no shortcut to these other than checking the answers to see if they work.
(A) doesn't really matter. If fewer than 10% don't seek out discounts, that means discounting wouldn't attract that 10%, but that doesn't explain the paradox.
(B) is irrelevant.
(C) explains it because the trips that are always sold out would now make less money than normal, and if the flights that normally lose money don't fill to the point of being profitable, you'd lose money. This isn't the only possible explanation for the apparent paradox (it is the only possible explanation listed), but it is a possible explanation, which is all you're looking for.
(D) doesn't help explain anything. If only a few people were attracted by discounts, then overall sales of tickets wouldn't go up. The question states that the number of tickets did, in fact, go up. You're trying to figure out why profits didn't increase along with the increased ticket sales.
(E) Again, this could explain the problem if ticket sales did not go up, but ticket sales did increase as a result of the discount. The thing you're trying to explain is why profits suffered despite of this.
