Whenever, we counter percentages in the question stimulus, we must immediately think of ratios. Also, try to tabulate the data to easily draw inferences.
1973 1976
Cigarette Consumption X 1.034 x
Tobacco Sales Z 1.18 Z
Population Y 1.05 y

As soon as we tabulate the data, we see that the ratio of Cigarette consumption/ Population (per capita consumption) has decreased from 1973 to 1976 and that ratio of Tobacco Sales/Population has increased from 1973 to 1976.

A.Increase in consumption does not necessarily mean increase in profits.
B.Correct Answer. can be inferred from the tabulation.
C.We do not have any data about the actual number of non-smokers in the population. The data given is only on increase in consumption and the increase in actual population, not on the increase in the population of non-smokers.
D.We are given data only on the consumption and sales of tobacco and cigarette products. We cannot infer anything about profitability.
E.We cannot infer this either. Maybe populations that consume cigarettes and tobacco are mutually exclusive. Hence, the increase in sales came from existing customers only.

Hi,

Start by dividing the stimulus into premises and conclusion:

Premise 1: Consumption of cigarettes in 1976 = 1.034 x 1973 level
Premise 2: Sale of chewing tobacco in 1976 = 1.18 x 1973 level
Premise 3: US population in 1976 = 1.05 x 1973 level

The task in this question entails us to find the correct conclusion. Start with checking out all the options:

A. The stimulus mentions nothing about profit margin and this statement has no basis in the above facts. INCORRECT.
B. Clearly, from the stimulus while the consumption of cigarette grew by 3.4%, while the population grew at 5%. Per capita consumption = Total consumption/Total population.
In 1973, if per capita consumption was x/y, then in 1976 it has changed to 1.034x/1.05y. This simplifies to a number less than 1 clearly implying that the 1976 per capita cigarette consumption was indeed less than 1973
C. The stimulus does not tell us anything about the number of smokers. It is possible that the numbers did not change at all between 1973 and 1976, yet the consumption increased or that the number of smokers went up the roof but the average consumption per smoker fell by a lot. There is no information for this inference. INCORRECT.
D. The stimulus does not mention anything about the profit margin of the cigarette or chewing tobacco manufacturers. INCORRECT.
E. No information is given on the number of people consuming either cigarette or chewing tobacco. INCORRECT.

So, the answer to this question is B.