Critical Reasoning

When we're asked what assertion is supported, we're really asked what MUST be true, i.e. what's inferable. If the 2 lemonade stands reported identical revenues and identical profits, we can infer 2 things:

1. the costs must have been identical, since Profit = Revenue - Costs.

2. Since revenue (simply speaking) can be expressed as (Price)(Quantity Sold), we can infer that Daisy's sold a greater quantity: (lower price)(greater quantity) = same total.

Let's evaluate the answers according to what MUST be true:

(A) On Monday, Daisy's Lemonade Stand sold fewer cups of lemonade than did the Lemon Shack.
No, this is the opposite of what must be true.

(B) The Lemon Shack sells higher quality lemonade than does Daisy's Lemonade Stand.
We can't make any inferences about why prices at one stand were higher than the other. Maybe it's quality, maybe it's location, maybe the owners just assigned prices at random.

(C) On Monday, Daisy's Lemonade Stand and the Lemon Shack incurred identical costs to run their businesses.
Yes, this does have to be true if we have identical profits and identical revenues.

(D) In general, lemonade consumers prefer the lemonade at Daisy's Lemonade Stand to the Lemonade at the Lemon Shack.
We can't make assumptions about people's thoughts or feelings. Maybe one stand was in a more visible location, or sold to all their friends, etc.

(E) The Lemon Shack would not increase its revenues by lowering its prices.
We don't know anything about what *would* be true in some hypothetical scenario. Maybe they'd sell more, maybe they wouldn't.

The only answer that must be true is C.