Critical Reasoning — Assumptions Statement: “Given the recent spurt in sugar prices in the open market, the government has asked dealers to release a vast quantity of imported sugar into the market.” Assumptions to evaluate: I. Dealers will comply.

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Solve this multiple-choice question and choose the correct option.

Accepted Answer

Introduction / Context:The government attempts to curb rising sugar prices by increasing supply via imported sugar. The logic rests on compliance and basic supply-demand economics, not on detailed behavior of indigenous sugar prices. Given Data / Assumptions: I: Dealers will release the sugar as directed. II: Increased supply will ease the price (downward pressure). III: Indigenous sugar prices will remain unchanged despite the intervention. Concept / Approach: A policy directive assumes implementation (I). To address high prices through supply, one must assume a standard inverse relation between supply and price (II), ceteris paribus. III is not necessary: indigenous prices may adjust too; the policy does not require them to stay fixed. Step-by-Step Solution: Retain I: Without compliance, the directive is futile.Retain II: The intended effect is lower prices via more supply; this is the core economic premise.Reject III: The policy’s success does not rely on indigenous prices being static; total market price is the target. Verification / Alternative check: If I fails, no additional supply reaches the market. If II fails, higher supply would not help prices. III is unnecessary to the causal chain. Why Other Options Are Wrong: II and III or I and III misplace emphasis on an irrelevant condition. “None” overlooks basic compliance and supply logic. “All” adds an unneeded constraint. Common Pitfalls: Assuming stability of all other price components; policies often target net outcomes, not invariance of every component. Final Answer: Only I and II are implicit

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