In a mature tourist market such as Bellaria there are only two ways hotel owners can increase profits: by building mo...

Farnoush on September 19 at 03:32PM

Why not A?

Hi Could you please explain why D instead of A? Thank you

1 Reply

Irina on September 19 at 04:01PM

@farnoushsalimian,

The argument tells us that there are only two ways to increase profits: build more rooms or improve what is already there. Rigid laws preclude any hotel construction, hence build more rooms option is out. The argument then concludes that hotel owners cannot increase their profits. For this conclusion to follow logically, one needs to assume that it is impossible to improve what is already there since for the argument as a whole to be false both options available to increase profits must be false.

(D) tells us that hotels already provide a level of luxury that is at the limit of what guests are prepared to pay for, meaning any improvements would generate no additional revenue. Since the hotel owners cannot build more rooms and cannot charge higher prices for improvements, we can conclude that hotel owners cannot increase their profits.

(A) tells us that hotels are already operating at capacity approaching 100%. This answer choice could be correct if the only way to increase profits was to build more rooms, and the argument told us that land use laws preclude any building expansion. But the argument tells us that another way to increase profit is to make improvements to existing rooms/ property that would allow hotel owners to charge higher prices and increase their profits even if the number of guests served remained the same given the 100% occupancy rate. Since this answer choice fails to demonstrate that improvements are impossible, we cannot logically conclude that both ways to increase profits are unavailable to hotel owners as required by the conclusion.

Let me know if you have any further questions.