This is a WEAKEN question, so the correct answer choice will undermine/ weaken the argument.
Let's briefly look at the stimulus.
The law required the "imitation butter" label for lower butterfat content when butterfat was considered nutritious and healthy. It is now known that butterfat is harmful. The public should be encouraged to eat foods with lower butterfat. Term "imitation" has negative connotations and deters people from purchasing such products. Therefore, manufacturers should be allowed to call reduced butterfat content butter "lite batter."
The author essentially argues that the manufacturers should be allowed to give reduced-fat butter a more appealing name because the law requiring an imitation label is based on outdated evidence and it is best to encourage people to eat healthier.
Let's look at the answer choices:
(A) is irrelevant. Even if manufacturers are motivated by profit/ interests of their shareholders, the fact that changing the name would encourage more people to eat healthier is enough for the conclusion to follow logically;
(B) is irrelevant. The addition of water might reduce the butterfat content even further and make it arguably even healthier, thus this fact alone does not undermine the author's conclusion.
(C) is irrelevant. Perhaps, some individuals are not deterred but what about many people that are deterred by the "imitation label"? Changing the label would benefit more people even if it has no impact on some;
(D) is irrelevant. Cholesterol might be one of the many factors, but it is still harmful, and encouraging people to consume foods with less cholesterol content is the premise the author relies on to reach his conclusion;
(E) is the correct answer choice. If most people deterred by the current label already choose healthier alternatives, then the author's argument that allowing manufacturers to get rid of the "imitation" label would encourage public to eat healthier is false as these people who are currently deterred by the "imitation" label already choose even lower butterfat content products.
Does this make sense? Let me know if you have any other questions.