OA is B.
Great explanation from Bharat!
I went over to GMATClub and found an explanation from one of our very best Veritas experts, Karishma. She has taken the time to write a very thorough explanation which I share with you below. If you are over on GMATClub look for Veritas Prep Karishma!
"Let's look at the argument:
Argument: Studies show that cash tips left by customers are larger when the bill is presented on a tray that bears a credit-card logo.
Why would that be? Why would there be a difference when the tray has no logo and when the tray has a credit card logo?
Psychologists' hypothesize that seeing a credit-card logo reminds people of the spending power given by the card they have (and that their spending power exceeds the cash they have right now).
We have to support the psychologists' interpretation.
Say, I change the argument a little and add a line:
Argument: Studies show that cash tips left by customers are larger when the bill is presented on a tray that bears a credit-card logo. Patrons under financial pressure from credit-card obligations tend to tip less when presented with a restaurant bill on a tray with credit-card logo than when the tray has no logo.
Now, does the psychologists' interpretation make even more sense. Understand that the psychologists' interpretation is only that 'seeing a logo reminds people of their own credit card status'. The part 'that their spending power exceeds the cash they have right now' explains the higher tips. If we are given that some tip more on seeing that card logo and some tip less on seeing it, it makes sense, right? Different people have different credit card obligation status. Hence, people are reminded of their own card obligation status and they tip accordingly. Hence, option (B) makes the probability of psychologists' interpretation being true stronger because it tells you that in case of very high card obligations, customers tip less. This is what you would expect if the psychologists' interpretation were correct.
It's something like this:
Me: After 12 hrs of night time sleep, I can't study.
Your theory: Yeah, because your sleep pattern is linked to your level of concentration. After a long sleep, your mind is still muddled and lazy so you cant study.
Me: After 4 hrs of night time sleep, I can't study either.
Does your theory make more sense? Sure! You said 'sleep pattern is linked to your level of concentration'. If I sleep too much, my concentration gets affected. If I sleep too little, again my concentration gets affected. So your theory that 'sleep pattern is linked to your level of concentration' certainly makes more sense.
Option (E) (the one that confuses people) is incorrect.
(E) - 'The percentage of restaurant bills paid with given brand of credit card increases when that credit card's logo is displayed on the tray with which the bill is prepared.'
This options supports the hypothesis that card logo reminds people of their own card (not of their card obligations). The psychologists' interpretation talks about the logo reminding people of their card status (high spending power or high obligations)"
