Difficulty: Easy
Correct Answer: Neither I nor II follows
Explanation:
Introduction / Context:
The problem examines how to move from a fiscal announcement to logically valid conclusions. A reduction of 33% of the subsidy is a policy detail; we must not over-interpret it into claims about public affordability or exact retail price changes.
Given Data / Assumptions:
Concept / Approach:
Distinguish "subsidy percent" from "price percent." Removing a fraction of the subsidy changes the consumer's out-of-pocket price by the removed amount, which need not equal 33% of the total price. Also, government motives for subsidy reform do not prove consumers’ ability or desire.
Step-by-Step Solution:
Conclusion I fails: Policy change could be driven by budget constraints or efficiency goals, not necessarily because people can afford more.Conclusion II fails: If the subsidy is S and price before subsidy is P, consumer pays (P − S). Withdrawing 33% of S raises the price by 0.33 * S, which is not necessarily 33% of P or of the consumer's previous payment. Thus the exact "≥33%" retail increase is not compelled.
Verification / Alternative check:
Consider numerical example: P = 100, S = 30, consumer pays 70. Reduce subsidy by 33% of S = 10; consumer pays 80 next month. The increase is 10/70 ≈ 14.3%, not 33%.
Why Other Options Are Wrong:
Common Pitfalls:
Confusing percent-of-subsidy with percent-of-price; reading government intent into consumer capacity.
Final Answer:
Neither I nor II follows
Discussion & Comments