Mall owner: Our mall's occupancy rate is so low that we are barely making a profit. We cannot raise rents...

GMAT Critical Reasoning : (CR) Questions

Source: Official Guide

Critical Reasoning

Weaken

MEDIUM

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Notes

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Mall owner: Our mall's occupancy rate is so low that we are barely making a profit. We cannot raise rents because of unacceptably high risk of losing our tenants. On the other hand, a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there stands empty. Clearly, therefore, to increase profits we must sign up new tenants.

Which of the following, if true, weakens the argument?

The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up.

The mall is located in a geographic area where the costs for air conditioning in the summers far exceed the cost of heating during the mild winters.

The mall's occupancy rate though low, has been relatively stable during the last few years.

The mall lost tenants as a result of each of the two drastic rent increases that have occurred here.

None of the established tenants is likely to need additional floor space in the near future.

Solution

Passage Analysis:

Text from Passage	Analysis
Our mall's occupancy rate is so low that we are barely making a profit.	What it says: The mall has lots of empty spaces and is barely profitable What it does: Sets up the problem the mall owner is facing What it is: Mall owner's assessment of current situation Visualization: Mall with 30% occupancy, making just $1,000 profit instead of desired $10,000
We cannot raise rents because of unacceptably high risk of losing our tenants.	What it says: Raising rent prices isn't an option because current tenants might leave What it does: Rules out one potential solution to the profit problem What it is: Mall owner's constraint/limitation
On the other hand, a mall that is fully occupied costs as much to run as one with a rental space here and a rental space there stands empty.	What it says: Running costs stay the same whether the mall is full or has empty spaces What it does: Introduces a key economic fact that will support the upcoming solution What it is: Mall owner's claim about operating costs Visualization: Full mall (100% occupied) = $50,000 operating costs; Partially empty mall (30% occupied) = same $50,000 operating costs
Clearly, therefore, to increase profits we must sign up new tenants.	What it says: The solution is to get more tenants to fill empty spaces What it does: Draws the main conclusion based on the previous premises What it is: Mall owner's conclusion

Argument Flow:

The mall owner starts by identifying the problem (low occupancy, barely profitable), then rules out raising rents as a solution, introduces the key fact that operating costs don't change with occupancy levels, and concludes that adding new tenants is the answer.

Main Conclusion:

To increase profits, the mall must sign up new tenants.

Logical Structure:

Since operating costs stay the same regardless of occupancy, and since raising rents isn't viable, the only way to boost profits is by filling empty spaces with new tenants who will pay rent without increasing costs.

Prethinking:

Question type:

Weaken - We need to find information that would reduce our belief in the mall owner's conclusion that signing up new tenants is the solution to increase profits

Precision of Claims

The mall owner makes specific claims about occupancy rates being low, operating costs being the same regardless of occupancy level, and inability to raise rents. The conclusion specifically targets 'signing up new tenants' as the profit solution

Strategy

To weaken this argument, we need to find scenarios that show signing up new tenants might not actually increase profits, even though we accept that costs stay the same and occupancy is currently low. We should look for hidden costs, practical limitations, or alternative explanations that make the 'new tenants = more profit' logic fall apart

Answer Choices Explained

The mall's operating costs could be cut by consolidating currently rented spaces in such a way that an entire wing of the mall could be closed up.

This directly weakens the argument by showing that operating costs aren't actually fixed as the mall owner claims. If tenants can be consolidated to allow closing an entire wing, this reduces operating costs and provides an alternative way to increase profits without needing new tenants. This undermines the mall owner's core reasoning that since costs stay the same regardless of occupancy, the only solution is to add more tenants.

The mall is located in a geographic area where the costs for air conditioning in the summers far exceed the cost of heating during the mild winters.

Information about seasonal air conditioning and heating costs doesn't address the mall owner's argument about needing new tenants to increase profits. This is about the breakdown of operating costs but doesn't challenge whether signing up new tenants is the right solution or whether costs truly remain constant with occupancy changes.

The mall's occupancy rate though low, has been relatively stable during the last few years.

The stability of the occupancy rate over recent years doesn't weaken the argument about what should be done going forward. Whether the low occupancy has been stable or fluctuating doesn't impact the logic that adding new tenants would increase profits given the current situation.

The mall lost tenants as a result of each of the two drastic rent increases that have occurred here.

This information about past rent increases causing tenant losses actually supports the mall owner's current position that raising rents isn't viable due to risk of losing tenants. If anything, this strengthens rather than weakens the argument by confirming that rent increases are indeed risky, making new tenants seem like the logical alternative.

None of the established tenants is likely to need additional floor space in the near future.

Whether current tenants need additional space doesn't affect the argument about signing up entirely new tenants to fill empty spaces. The mall owner's solution focuses on bringing in new tenants rather than expanding existing ones, so this information is irrelevant to the conclusion.

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