This question is a 'must be false' question. For these types of questions, it's always easier to think of them as 'cannot be true' questions. The four incorrect answers will be choices that 'could be true.' Before we dive into the answer choices, let's see what happens when we apply this new conditional statement for this local question. If Zinser signs with Star Agency, we know that Young will also be with Star Agency. We have:
FA: x
PA:
SA: z, y
The locations of x, y, and z are definite but this is not yet the case with Traugott (t) and West (w).
Looking at the answer choices:
(A):' Premier Agency signs exactly one performer'...w can go with fame and t can be the only one with premier. This choice could be true: Eliminate
(B): 'Star Agency signs exactly three of the performers'...w can join Star Agency without violating any rules, making there be 3 performers: y, z and w. This choice could be true: eliminate
(C): 'Traugott signs with Star Agency': Looking at the 4th rule of the game, we know that if Traugott signs with Star Agency then West will also sign with Star. Applied in this scenario, this will lead to there being four performers with Star: z, y, t and w and none for Premier Agency. This cannot be true, so choice C is the answer.
(D) 'West signs with Star Agency': this could be true-see explanation for Choice B: eliminate
(E) 'none of the other performers signs with the same agency as Xavier': t or w (but not both) could sign with Xavier without breaking any rules. This could be true: eliminate