ParadoxDiff: Medium
Logic Breakdown
Passage Summary: Big movies make a lot of money compared to what they cost, but most of the money the movie industry makes overall actually comes from cheap movies.
Reasoning: Big-budget movies are individually very profitable (grossing 2–3 times their costs), yet the bulk of the movie industry's total revenue is generated by low-budget films.
Analysis: We have a classic volume versus margin puzzle here. While individual blockbusters are cash cows, the industry's total revenue is dominated by low-budget films. To resolve this, we should look for an answer that explains why the sheer number of low-budget movies outweighs the high individual earnings of the big ones. It turns out that a mountain of pennies can indeed outweigh a handful of gold coins.
Reasoning: Big-budget movies are individually very profitable (grossing 2–3 times their costs), yet the bulk of the movie industry's total revenue is generated by low-budget films.
Analysis: We have a classic volume versus margin puzzle here. While individual blockbusters are cash cows, the industry's total revenue is dominated by low-budget films. To resolve this, we should look for an answer that explains why the sheer number of low-budget movies outweighs the high individual earnings of the big ones. It turns out that a mountain of pennies can indeed outweigh a handful of gold coins.
Passage Stimulus
Passage Redacted
Unlock Full Passage1.Which one of the following, if true, most helps to resolve the apparent discrepancy above?
Correct Answer
B
If there are many more low-budget movies than big- or medium-budget ones, then the combined revenue from the numerous low-budget films can exceed the combined revenue from the relatively few blockbusters, resolving the discrepancy.
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