Statement — Oil marketing companies decided to defer the usual fortnightly revision of petrol and diesel prices due to volatility in world markets. Question — Which conclusion necessarily follows?
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Aif only conclusion I follows
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Bif only conclusion II follows
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Cif either I or II follows
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Dif neither I nor II follows, and
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ENone of the above
Answer
Correct Answer: if only conclusion II follows
Explanation
Introduction / Context:Companies defer revising administered fuel prices because global prices are volatile. We compare a macro impact claim (cascading inflation from diesel) versus a risk-management rationale (worry about sudden spurts upsetting calculations).
Given Data / Assumptions:
- Action: defer revision.
- Stated reason: world-market volatility introduces uncertainty.
Concept / Approach:Conclusion II rephrases the precautionary motive implied by “volatility.” Conclusion I, while often true in economics, is not stated nor required to justify the deferral decision.
Step-by-Step Solution:
Conclusion I: “Diesel price rises may have cascading effects.” This is a general economic proposition, not entailed by the specific deferral announcement.Conclusion II: “Companies are worried a sudden international price spurt may upset earlier calculations over the next weeks.” This aligns directly with “defer due to volatility.”Verification / Alternative check:Even if diesel increases were inflation-neutral (hypothetically), deferring could still be sensible due to pricing risk — so II follows independently of I.
Why Other Options Are Wrong:Any option endorsing I overstates what is given.
Common Pitfalls:Importing macroeconomic consequences not referenced in the stem.
Final Answer:if only conclusion II follows