CR-In the past, every ten-percentage-point

[hitesh.sakkerwal]

In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. Coponia is about to raise taxes on cigarettes by 9 cents per pack. The average price of cigarettes in Coponia is and has been for more than a year 90 cents per pack. So the tax hike stands an excellent chance of
reducing per capita sales of cigarettes by four percent. Which of the following is an assumption on which the argument depends?
A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.
B. Previous increases in cigarette prices in Coponia have generally been due to increases in taxes on cigarettes.
C. Any decrease in per capita sales of cigarettes in Coponia will result mainly from an increase in the number of people who quit smoking entirely.
D. At present, the price of a pack of cigarettes in Coponia includes taxes that amount to less than ten percent of the total selling price.
E. The number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years.

OA: A

Could you explain option A and why E cannot be the answer?

thanks.

[agarwalmanoj2000]

Hi Hitesh,

Conclusion: The tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.

If E is the assumption then on negation conclusion should fall apart i.e. tax hike will NOT reduce per capita sales of cigarettes by four percent.

E. The number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years.

Negate: The number of people in Coponia who smoke cigarettes has NOT remained relatively constant for the past several years.

Per capita sales of cigarettes may be different for each year.
Say last year per capita sales of cigarettes was 10 and this year per capita sales of cigarettes is 12. If this year cigarette prices is increased by ten-percentage-point then per capita sales of cigarettes will still fall by four percent. Conclusion is still intact, so rule out E.

--

A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.

Negate: Tobacco companies are LIKELY to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.

If tobacco companies will reduce their profit by not increasing the price of cigarettes, then smokers will not reduce their smoking and per capita sales of cigarettes will NOT fall by four percent. Conclusion is falls apart, so this is an assumption.

[tim]

Thanks! Hitesh, let us know if you still have questions about this one..