Consider the following argument as true and decide which of the given assumptions is implicit. Argument: The Best Bus Travels company has decided to increase its fare by 10 percent. Assumptions: (1) Passengers may opt for other buses that cost less than the Best Bus Travels company. (2) The demand for the buses of this company may remain unchanged even after the fare hike.

Introduction / Context:
This critical reasoning question focuses on assumptions behind a business decision. The Best Bus Travels company has decided to raise its fare by 10 percent. You are asked whether certain statements about passenger behaviour are assumptions implicit in this decision. Understanding what a decision logically presupposes, as opposed to what might simply be possible consequences, is the core skill being tested.

Given Data / Assumptions:

• Argument: The Best Bus Travels company has decided to increase its fare by 10 percent.
• Assumption 1: Passengers may opt for other buses that cost less than the Best Bus Travels company.
• Assumption 2: The demand for the buses of this company may remain unchanged even after the fare hike.
• Task: Decide which of these are implicitly assumed in the decision to increase fares.

Concept / Approach:
An implicit assumption is something that must be taken for granted for the decision or statement to make sense. When a firm increases its prices, it might analyse several possible outcomes: demand might fall, might remain the same, or might even increase due to perceived quality. However, none of these specific outcomes is logically forced to be assumed just to make the decision. The decision simply assumes that a fare increase is acceptable and potentially beneficial, regardless of which detailed demand scenario actually occurs within reasonable limits.

Step-by-Step Solution:
Step 1: The key fact is that the company has decided to increase its fare by 10 percent.Step 2: For this decision, the company might have considered many possibilities: some passengers may leave, some may stay, or overall revenue may change.Step 3: Assumption 1 states that passengers may opt for other cheaper buses. This is a possible reaction, but the company does not have to assume this will happen in order to decide on a fare hike.Step 4: In fact, management might hope that most passengers will stay despite the increase. Whether some passengers leave or not is an uncertain outcome, not an underlying assumption.Step 5: Assumption 2 states that the demand for the buses may remain unchanged after the fare hike. Again, this is only one possible scenario among several. The company might be expecting a small drop in demand or a small increase in revenue even with some loss of passengers.Step 6: The decision to raise fares does not logically require the belief that demand will remain unchanged; it only requires a belief that the net outcome is acceptable, which could include many combinations of demand and fare level.Step 7: Therefore neither Assumption 1 nor Assumption 2 is strictly implicit. They describe possible consequences, not necessary presuppositions.

Verification / Alternative check:
Imagine three scenarios that fit the decision. Scenario A: The company believes demand will hardly change, so total revenue rises. Scenario B: The company expects some passengers to switch to cheaper buses, but revenue still rises enough to justify the decision. Scenario C: The company raises fares temporarily during peak season when demand is inelastic. In all three scenarios, the decision to raise fares is rational, but only in scenario A does Assumption 2 hold, and Assumption 1 may or may not hold. This shows the decision does not rely on either assumption as a must.

Why Other Options Are Wrong:

• Option a claims both assumptions are implicit, but as seen, the decision can be made without committing to either specific demand reaction.
• Option b and option c incorrectly treat one of the demand scenarios as necessary for the decision, which is not justified.
• Option e adds a claim about truth values which goes beyond what is asked and still does not correctly capture the notion of implicit assumptions.

Common Pitfalls:

• Confusing possible outcomes (what may happen) with assumptions (what must be believed for the step to be reasonable).
• Thinking that every plausible reaction of passengers must have been assumed by the company.
• Over interpreting the decision as if it guarantees or presupposes a very precise demand response.

Final Answer:
Neither assumption 1 nor assumption 2 is implicit in the company's decision to increase fares by 10 percent.