Statement — Gold demand fell in the first half due to rising prices, and the trend is likely to continue in the second half. Conclusions: I. Customers are highly price-sensitive. II. There will be no improvement in demand in the second half.
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AOnly conclusion I follows
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BOnly conclusion II follows
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CEither I or II follows
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DNeither I nor II follows
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EBoth I and II follow
Answer
Correct Answer: Only conclusion I follows
Explanation
Introduction / Context:The statement provides a cause (rising prices) and an observed effect (lower demand), with a probabilistic outlook for continuation. We must separate firm inference from speculation.
Given Data / Assumptions:
- Price ↑ → demand ↓ in H1.
- Trend “likely” to continue in H2.
Concept / Approach:From the cause–effect link we infer price sensitivity (I). However, “likely to continue” is not the same as certainty; thus claiming “no improvement” (absolute) in H2 overstates the statement.
Step-by-Step Solution:1) Translate: demand responds inversely to price → price sensitivity.2) Probabilistic language cannot justify a categorical prediction.
Why Other Options Are Wrong:Only II/Either/Both: treat “likely” as “will definitely,” which the premise does not support. Neither: ignores the clear price-sensitivity inference.
Common Pitfalls:Turning a forecast into a guarantee.
Final Answer:Only conclusion I follows.