here in effect we are being asked for what is the assumption involved.
stimulus compares two people. we need apples to apples comparison. we can compare two ppl only if they both are of the same age, otherwise the conclusion does not hold good. Lets check the options now.
A. The age of the man wearing the business suit is greater than that
of the man wearing casual clothing. [then it is not due to the business suit. the man is naturally older than his counterpart. so the observer might not have based that judgement based on the suit. Eliminated!]

B. The older a man is, the more likely it is that he will wear a
business suit. [Here we reverse the relationship. We are again telling that the business suit is worn by an older man. so the man with business suit is older than a person wearing casual clothing. makes the same mistake of A. Eliminated!]

C. The age of the man wearing the business suit is equal to the age of
the man wearing casual clothing. [Perfect! apples to apples comparison. My answer]

D. The average observer’s estimates of age are generally more accurate
regarding casually dressed people than formally dressed people. [if the observer's estimates are not accurate, then how can u judge based on it. Eliminated!]

E. The average observer’s estimates of age are generally more accurate
regarding formally dressed people than casually dressed people.[same mistake as D. Eliminated!]

Hope this helps!

P1. Particular Phenomenon in relationship between age and attire.
P2. Average Observer : the more formally dressed, the older the person is.

CCLN: Thus of two men, one dressed in Formal Suit and the other in a casual clothing, average observer estimates the person with Formal Suit to be five years older than the other.

We have to draw the conclusion based on the two premises stated above. And this means the guess of the observer should be based just up on the attire rather than any other thing. This could be achieved only when both of them are equally old.

So I go with C.