The statement will be insufficient if we can name different numbers that satisfy the statement, but have different values in the tenths digit.

The first statement says the hundredths digit is 5. So, the number could be:
5.25
21.75
16.35
Insufficient

Statement 2 says that rounded to the nearest tenth, x is 54.5. That means could x could be:
54.51 -- a 5 in the tenths place
54.49 -- a 4 in the tenths place
Insufficient

Put the statements together -- then we know that the hundredths digit will cause us to round UP, and that, once we do round up, our number will be 54.5. Thus, x must equal 54.45. It's the only number that satisfies both statements.

Answer is C

I missed this step and marked B. What's the thought process I need to have to avoid such mistakes?

Jose Ferreira wrote:The statement will be insufficient if we can name different numbers that satisfy the statement, but have different values in the tenths digit.

The first statement says the hundredths digit is 5. So, the number could be:
5.25
21.75
16.35
Insufficient

Statement 2 says that rounded to the nearest tenth, x is 54.5. That means could x could be:
54.51 -- a 5 in the tenths place
54.49 -- a 4 in the tenths place
Insufficient

Put the statements together, then we know that the hundredths digit will cause us to round UP, and that, once we do round up, our number will be 54.5. Thus, x must equal 54.45. It's the only number that satisfies both statements.

Answer is C

i did the same mistake.....moreover i initially i failed to recognize that it is a decimal number...