In the past, every ten-percentage-point increase in cigarette prices

If the current base price is 89 cents + 1 cent tax = 90 cents and we add a 9 cent tax (without decreasing the base price), the overall price goes up by 10% and we have the suggested outcome.
If the current base price is 81 cents + 9 cents tax = 90 cents and we add a 9 cent tax (without decreasing the base price), the overall price goes up by 10% and we have the suggested outcome.
If the current base price is 1 cent + 89 cents tax = 90 cents and we add a 9 cent tax (without decreasing the base price), the overall price goes up by 10% and we have the suggested outcome.

The new tax would (without decreasing the base price) raise the overall price by 10% regardless of whether the current tax accounts for less than 10%, exactly 10%, or more than 10% of the current selling price.

in last part of A]

''to avoid an increase in the cost per pack to consumers in Coponi''- what does it translates to?

basically companies will not reduce their profit and decrease the SP of cigarettes pack.

The tax per pack of cigarettes is about to go up by $0.09. To avoid an increase in the price paid by consumers, the tobacco companies would have to accept $0.09 LESS profit per pack—making the overall price paid by the consumer (including taxes) the same before and after the tax increase.

Choice A says that tobacco companies will NOT accept a $0.09 decrease in their profits per pack.

Like other negative statements (involving "NOT") on Assumption problems, this one is an ideal candidate for the negation method: Negate the statement, then combine it with the argument to see whether it creates a contradiction / defeats the logic of the argument. If that happens, then the original statement—before you negated it!—is an assumption.

Negate the possible assumption: Tobacco companies WILL accept the nine-cent decrease in profits, so that the consumers keep paying the same price overall.

Well... The logic of the argument depends on the idea that the consumer price of cigarettes is going to increase. If not, then the logic of the argument is destroyed.
Therefore, A is an assumption.

Hey. I am not able to reject D. And none of the explanations are (imo) doing enough to reject it. Can someone/some expert please break this down and help me? I get why A is a good option, but I fail to see how it is better than D.

Primarily because if they don't assume taxes worth 10% are there, why would they even launch it in the first place?

You take an action ONLY because something is missing. a 10% tax was not there. HENCE, they looked at increasing it to 10%...

Am I missing something?

Understanding the argument -
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. - Fact. It means if in the year 2021, the price was raised by 10%, the sales were X units, and if we raise the price in 2022 by 20% (10 percentage points more) vis-a-vis 2021, the sales becomes 0.96X.
Coponia is about to raise taxes on cigarettes by 9 cents per pack. Fact
The average cigarette price in Coponia has been for more than a year, 90 cents per pack. Fact. Take two scenarios. Say in scenario 1 it's 91 cents, and in scenario 2, it's 180 cents. So if we correlate the earlier statement, the 9 cents raise in taxes seems like 10%, but if we compare it with scenario 2 it's 5%. I just shared two scenarios to highlight that the author has used 90 to confuse concerning the ten percentage point number. So, be mindful of the trap.
So, the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent. Conclusion. Ok, it means the author assumes it looks like scenario one, which is a 10% point increase. The author also assumes that 100% of this tax increase, which is a 10% point, gets passed on to the customers. What if the sellers absorb 50% and pass 50% to the customers? So a lot of assumptions here. Let's see what the options have to offer.

Option Elimination -

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. - Oh, if you negate it, it says that the Tobacco companies may absorb most of the 10% increase, and if that happens, sales will not decrease, and the conclusion falls flat. Ok.
B. Previous increases in cigarette prices in Coponia have generally been due to increases in taxes on cigarettes. - Previous increase happened for whatever reason is not of interest as it doesn't talk about the scope of our argument, which is to find the necessary condition (not a sufficient condition) for the conclusion to be true, which is "the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent." Out of scope.
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. It's sharing another reason for the decrease in per capita sales. The argument is talking about sales of cigarettes (say apples), and this is talking about per capita (say oranges). Out of scope.
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. - the current amount of taxes is a distortion. Say the current tax is 1%. So we know we have room for 9% points to reach the 10% points maybe. But what if it's 9%? Then there is only a 1% point gap, but we'll have a 10% point gap, i.e., taxes increase to 19%. So a lot of assumptions here.

If we negate it, it becomes "the price of a pack of cigarettes in Coponia includes taxes that amount to equal to or more than ten percent of the total selling price. Say it's 10% for now. So now it seems like we are increasing by 10% (if we compare 9 cents with 90 cents) - the negation is strengthening the conclusion, but it can be 5% (if we compare 9 cents with 180 cents), and the conclusion breaks. We need an option that is necessary and does not switch sides. This is a distortion to waste our time.

E. The number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years. Ok, so there were 10,000 people when a 10% increase happened and 4% sames reduced and now also there are 10,000 people. So negate it. The number is not stable. Doent matter. What matters is the number of people now - reduced or more. The scope of the argument is if we increase the price by 10% the sales with respect to now reduce by 4%. This is a distortion.

Let’s revisit the argument and consider some things we know about cigarette prices:

• We know that the average price of a pack of cigarettes in Coponia is currently 90 cents.
  
• We also know that Coponia is about to raise taxes on cigarettes by 9 cents per pack.

What we DON’T know is how much (if any) tax is ALREADY included in the existing 90-cent average pack price. Taxes could account for a relatively modest chunk of that 90 cents -- say, 2.7 cents (3% of the total pack price). Or taxes could account for a much bigger chunk -- for example, 45 cents (a whopping 50% of the total price).

If we bear in mind that an assumption is something that MUST be true, let’s take a look at answer choice (D): in order for the argument to hold up, does it HAVE to be true that the current price of a pack of cigarettes in Coponia includes taxes that amount to less than 10% of the total selling price? Well, no, as the hypothetical numbers above illustrate.

One other thing that might be useful to highlight: the argument doesn’t tell us that Coponia is about to raise taxes to 9 cents per pack, which would mean the total tax after the increase would be 9 cents per pack. Instead, it says that Coponia is about to raise taxes “by 9 cents per pack,” meaning that whatever taxes are right now, Coponia is going to add an extra 9 cents per pack on top of that. Just a little difference between two tiny prepositions, but it makes a world of difference here.

I hope that helps!

I want an in depth explanation of A pls

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.

The conclusion of the argument is the following:

the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent

The support for the conclusion is the following:

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.

We see that the reasoning of the argument is basically the following: Since ten-percentage-point increases in cigarette prices have caused four-percent decreases in per capita sales of cigarettes, the tax hike of 9 cents per pack will likely cause a four-percent decrease in per capita sales of cigarettes as well since 9 cents is ten percent of the current price of cigarettes, which is 90 cents.

The argument seems pretty tight, but we can notice at least a couple gaps in it.

One is that the support for the conclusion is about past increases whereas the conclusion is about a future increase, and there may be key differences between the past and future increases.

Also, the support involves the effects of price increases whereas the conclusion is about the effects a "tax hike," which may be somehow different from a price increase. Honestly, I didn't pick up on this gap when I first read the passage, but it turns out to be key to understanding the correct answer.

Which of the following is an assumption on which the argument depends?

This is an Assumption question, and the correct answer will state something that must be true for the evidence to effectively support the conclusion.

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.

This choice is interesting.

The support for the conclusion is information about what occurred following "every ten-percentage-point increase in cigarette prices."

The conclusion is about what will occur as a result of a 9-cent "tax hike."

What we can notice is that a "tax hike" and a "price increase" are not necessarily the same thing. After all, a tax hike might not result in a price increase.

For instance, if tobacco companies reduce their profits to avoid an increase in the cost per pack, then a tax hike will not result in a price increase. Rather, following a tax hike, tobacco companies will reduce their profits to avoid a price increase, and the price of cigarettes will remain the same.

So, the argument depends on it being the case that "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." After all, if that's not true, and they are likely to reduce their profit to avoid an increase in the cost per pack, then the tax hike will not likely cause a decrease in cigarette sales since the tax hike won't likely result in a price increase.

In other words, for the argument to work effectively, this choice must be true.

So, this choice states an assumption on which the argument depends.

Keep.

B. Previous increases in cigarette prices in Coponia have generally been due to increases in taxes on cigarettes.

This choice doesn't have to be true for the argument to work.

After all, the point of the argument is simply that price increases have had a certain effect in the past, so a new price increase will likely have the same effect.

The way in which that price increase happens doesn't really matter.

After all, we have no reason to believe that people will respond to a price increase resulting from a tax hike differently from how they have responded to price increases resulting from other factors.

Since people could respond the same way regardless of what the price increase results from, the argument does not depend on the assumption that previous price increases have been due to tax hikes.

Eliminate.

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.

This choice doesn't have to be true for the argument to work.

After all, even if a decrease in cigarette sales would result from something other than increase in the number of people who quit smoking entirely, per capita sales could still decrease as a result of the tax hike.

Eliminate.

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.

This choice doesn't have to be true for the argument to work.

After all, regardless of what percentage of the selling price is currently represented by taxes, a ten-percent increase in the price will likely have an effect similar to the effect of other similar increases.

Eliminate.

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

This choice doesn't have to be true for the argument to work.

After all, regardless of whether the number of people who smoke has increased, decreased, or remained constant in recent years, a ten-percent increase in the price could cause whoever is smoking to smoke 4 percent less.

Eliminate.

Correct answer: (A)

my reasoning for this question is that increase 10% on selling price customer cost more and it reducs 4% sales. but increase 10% in tax per pack does not seems more cost for customer so it is better option to increase tax by 10% rather than i creasing selling price. is that. reasoning is correct some one help me (GMATNinza, Marty murray)

The "9 cents per pack" tax hike is a sales tax that will be paid by the customer, effectively increasing the price by 10%. Even though that isn't directly stated, it's implied by the author's reasoning: a 10% increase in price should cause a 4% decrease in sales.

For an explanation of the OA, check out this post: https://gmatclub.com/forum/in-the-past- ... l#p2276431.