At an enormous research cost, a leading chemical company has developed

This is a nice, inference based question. The key lies in interpreting the sarcastic comment mentioned in the stimulus. But before we get to that, let us go through the entire stimulus:

Premises:
1) A leading chemical company has developed a manufacturing process for converting wood fibers into a plastic.
2) This new plastic can be used for the hulls of small sailboats.

Conclusion: The mania for high technology can scarcely go further than this.

From the conclusion, we can surmise that the author does not rate the innovation of the chemical company very highly. It is driven by the usage promoted ie; that this plastic can be used for hulls of small sailboats. Given this background, the sarcastic question posed in the stimulus, "But what does the company think sailboat hulls used to be made of?", can have only one answer. Given that the author seems to think of the use of this plastic on hulls as not being an important innovation, it must follow that the hulls used to be made from wood earlier. Only then, converting the wood to plastic and then using the plastic to make hulls can be truly considered to be a waste of resources, technology just for the sake of it, or, in other words, "mania for high technology".

Let us examine the answer options:

(A) plastic is unlikely to be durable enough for high-quality sailboat hulls This takes the argument much further than the implication in the stimulus. Eliminate.

(B) the research costs of developing the process outweigh any savings possible from the use of the plastic The passage questions the very utility of converting wood to plastic for use in hulls, costs and profits do not come into the picture at all. Eliminate.

(C) a small sailboat is not normally regarded as a high-tech product The passage is about the usage of plastic made from wood in sailboat hulls, not about the sailboat themselves. Irrelevant. Eliminate.

(D) hulls for small sailboats can be made from wood without converting it into plastic Correct answer and consistent with our pre-thinking.

(E) many other spheres of human activity are in far greater need of technological research The argument in the passage is restricted to using plastic made from wood in sailboat hulls, irrespective of need of research in other fields. Irrelevant. Eliminate.

Hope this helps.