Detailed Answer
Answer (D) is correct. Mall C will never be the optimal choice because it will be less desirable than
Mall B as long as 1% of gross revenue is less than $150,000, that is, until revenues reach $15,000,000 [$150,000 minimum ÷ (4% – 3%)]. However, at any level of revenues greater than $7,500,000 ($300,000 ÷ 4%), Mall A (a flat $300,000 rental) will be more desirable than either of the other choices. Thus, Mall C will never be the most desirable.