Conclusion: So the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.
What assumption did the author make to arrive at this conclusion?
B. This has got nothing to do with reducing per capita sales in future. The previous trend does not indicate anything about the future.
C. This does not support the conclusion. An assumption should support the conclusion.
D. The percentage of tax included in the price does not affect the consumer. What matters is the final price.
E. It could be that no tax hikes were enforced in the past several years. Doesn't affect the conclusion.
A. It could be that in the past, each time a 10% tax raise is imposed, the tobacco companies responds with a price hike which results in a reduction of cigarette sales. In order for the conclusion to be true, the companies must continue to do same. This is the assumption made. Choice A simply states that the probability of the companies not increasing prices (but instead reduce their profits) is very low (unlikely).
-BM-