Till last year in the country of Scavengia, a nation with falling

Question

Till last year in the country of Scavengia, a nation with falling birth rates, every 5% rise in condom prices has decreased per capita sales of condoms by five percent. Scavengia is about to raise taxes on condoms by 5 cents per pack. The average price of condoms in Scavengia is and has been for more than a year 50 cents per pack. So the tax hike stands an excellent chance of reducing per capita sales of condoms by five percent.

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

A. Any decrease in per capita sales of condoms in Scavengia will result mainly from an increase in the number of people who are past the reproductive age.
B. At present, the price of a pack of condoms in Scavengia includes taxes that amount to less than ten percent of the total selling price.
C. Condom companies are unlikely to reduce their profit per pack of condoms to avoid an increase in the cost per pack to consumers in Scavengia.
D. The number of people in Scavengia who use condoms has remained relatively constant for the past several years.
E. Previous increases in condom prices in Scavengia have generally been due to increases in taxes on condoms.

badalthukral · Answer

Hello Experts,

Can you please provide a reason why the OA is C?

sindhugh · Answer

i was confused between C and D but i guess per capita means per head. so the population changing or remaining constant should not matter. hence eliminated D

lostin · Answer

In Stem, it says that tax hike will result in increased condom prices and in turn, reduced per capita condom sales.

Option A - No mention of age - so out of scope
Option B - Not relevant as we are talking about increase in tax on top of existing cost - Eliminate
Option C - Correct answer. If tax hike doesn't result in increased cost, given argument is no more valid.
Option D - Stem talks about per capita usages so nothing to do with the number of people using condoms. No information about cost and usage trends provided.
Option E - This statement doesn't add any relevant information except saying that condom companies haven't increased cost without tax hikes.

apovit · Answer

Hi!
We are supposed to find an assumption
So, we break the question then,
Current average price of a pack of condoms is 50 cents and after new tax it should rise to 55 cents
Average price per pack= Current Manufactures's Price(45 cents)+ Tax(5cents)
We are given that the hike in the price of packet because of tax will lead to decreased sales, so what if Current Manufactures's Price goes down by 5 cents then there will be no overall effect on the end consumer price, so we have to assume that the current manufacturer's price does not go down.

Thanks.
Kudos are always welcome

ravigupta2912 · Answer

I voted C but i'm not convinced. The answer choice uses the word "unlikely".

"Condom companies are unlikely to reduce their profit per pack of condoms to avoid an increase in the cost per pack to consumers in Scavengia."

Negating this we get:-

"Condom companies are LIKELY to reduce their profit per pack of condoms to avoid an increase in the cost per pack to consumers in Scavengia."

This does not destroy the argument. The condom companies may still not reduce their profit per pack of condoms. "likely" and "unlikely" speak of probabilities. An assumption needs to be very crystal clear failing which the argument will fall.

Further, the conclusion too does not assume a proportionate fall in revenues (only 5% vis-a-vis the 10% increase in taxes 10%) as compared to the premise (5% decrease in revenue for 5% increase in taxes)

Till last year in the country of Scavengia, a nation with falling

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Till last year in the country of Scavengia, a nation with falling

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