Video Explanation

Text Explanation

Premise #1 – Most of the standard units have sold.

Premise #2 – Only two of the eight penthouses have sold.

Conclusion: Drop the price of the penthouses.

(A) That the first unit to sell in a luxury condo is usually a standard unit doesn’t relate to the specific issue here. Also, presumably most condos have more standard units than penthouse suites, so it makes sense that those would sell first. We don’t know anything about when the first penthouse is sold. Had (A) been something like, “The last units to sell in a luxury condo are typically the penthouses”, then it would be the answer.

(B) implies that the plan would work. We want a weakener.

(C) is wrong since we don’t know anything about the difference between non-waterfront and waterfront units. Maybe, the former are larger and nicer.

(D) gives us a compelling reason why the penthouses have yet to sell. Management has so many applications that they are sorting through since demand for the penthouses is so high. Therefore, dropping the price by 20% would be a very bad idea.

(E) suggests that dropping the price 20% might be selling the penthouses short, so to speak. But it does not give us a clear reason that dropping the price 20% would actually be a very bad idea the way that (D) does. See, giving a discount on the penthouses and then getting buyers is much better than already having many interested buyers and then giving a discount.