Well.....firstly....none of the other option really are right. They either have no bearing on the argument or they contradict the argument. Hence C is right.

On further observation of C, you see that what it says is probably the right assumption that has been made.

If the higher salaries was because of scarcity of resources, then an increase in resources will result in reduction in salaries right? Classic supply and demand.

think of it this way" your town has only one cycle shop. So he charges a lot for a cycle, but since you have no choice, you are willing to pay him that much cos you need a cycle. But then 10 other shops spring up and each one offers reduced pricing to get business from you. So you refuse to pay the high amount because you know that one of them will eventually offer it for lesser.

Make any sense?