There is no rule that tells us that a city cannot have more than one hospital. There is a rule saying no institution is in more than one of the cities, meaning no any one of the institutions is located in such a way as to occupy the territory of more than one city. There are four hospitals total in a six city area, as well as two jails and two universities.
The rules also tell us that none of the cities contain more than one jail, and each city that contains a jail contains at least one hospital, meaning that in theory it is possible that we could have a city that contains a jail as well as three hospitals, and another city that contains a jail and one hospital, or each city with a jail could have two hospitals, or two cities with a jail could each have one hospital. The following is a list of all possible scenarios:
(1) 1J - 3H 1J -1H
(2) 1J - 2H 1J - 2H
(3) 1J - 1H 1J - 1H 2H
(4) 1J - 1H 1J- 1H 1H 1H
The question asks us to identify a city that MUST contain fewer than three hospitals.
The rules tell us that city 3 contains a university and city 6 contains a jail. We can infer that city 6 must contain at least one hospital, city 6 contains no universities, and city 3 contains no jails.
The rules also tell us that universities are located in cities that do not share a common boundary, thus the second university must be in City 2 or City 6, but we know that a jail is in City 6, thus the second university must be in City 2.
1: 2: U 3: U ~J 4: 5: 6: J H =1+
Since each of the cities that contain jails - City 6 and one more city other than City 2 or City 3 -must contain at least 1 hospital, we can conclude that any city that has no jail could at most have two hospitals out of four. We only know with certainty that Cities 2 and 3 have no jails because jails and universities cannot share a city, thus we can conclude that neither City 2 nor City 3 could have more than 2 hospitals - answer choice (B).
Let me know if this makes sense and if you have any further questions.
