Introduction / Context:
The statement reports a widespread promotional tactic (prizes/discounts) explicitly aimed at “attracting customers.” We must infer what condition in the market makes such tactics relevant. In assumption questions, focus on what must be true for the stated action to make business sense.
Given Data / Assumptions:
- Observed action: widespread discounts and prize schemes this year.
- Stated objective: attract customers (i.e., stimulate demand).
- Assumption I: High profits are being shared with customers.
- Assumption II: Inventory is ample but sales are sluggish; customer enthusiasm is low.
Concept / Approach:
Discounting is generally used to boost demand, clear stock, or compete in a slow market. Therefore, II aligns naturally with the motive “to attract customers.” Assumption I (profit sharing) is neither necessary nor typical; firms may discount even when profits are thin to chase volume or reduce inventory.
Step-by-Step Solution:
Ask: If II were false (sales already strong, customers cheerful), would mass discounting “to attract customers” be needed? Less likely—so II supports the rationale.Ask: If I were false (no extra profits to share), could the discounting still make sense? Yes—discounts can be strategic, not philanthropic. Thus I is not necessary.
Verification / Alternative check:
Business logic commonly ties promotions to demand stimulation when sales lag or competition rises, consistent with II.
Why Other Options Are Wrong:
Only I (option a) imputes generosity, which is not required to justify discounts.Either (option c) is too weak; I is not required, II fits.Neither (option d) is incorrect because II is reasonably implicit.Both (option e) overstates by adding the unnecessary profit-sharing motive.
Common Pitfalls:
Confusing promotional pricing with “sharing profits”; promotions are typically strategic, not charitable.
Final Answer:
Only assumption II is implicit
Discussion & Comments