Why is the answer B? Plz explain.

You know that each person's share is [tex] n [/tex] dollars, and there are [tex] m [/tex] people in total.
So, if each of the [tex] m [/tex] people pays [tex] n [/tex] dollars, the total rent is [tex] mn [/tex] dollars.
For example, if you know that 7 people share the rent, and each of them pays 5 dollars, then the total rent is [tex] 7\cdot 5 = 35 [/tex] dollars.
So, if the total of [tex] mn [/tex] dollars is shared between [tex] m^2 [/tex] people, each of them will pay
[tex] \cfrac{mn}{m^2} = \cfrac{n}{m} \text{ dollars} [/tex]
m people each pay n dollars for a total rental of mn dollars.
If m^2 people share the cottage, then each one will pay
total/no. of people
=mn/m^2 = n/m dollars each, assuming there is no supplement for additional peole, as many hotels do.