I am having a hard time distinguishing between two answers.
In the year following an 8-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell 10%. In contrast, in the year prior to the tax increase, sales had fallen 1%. The volume of cigarette sales is therefore strongly related to the after-tax price of a pack of cigarettes.
The argument above requires which of the following assumptions?
A. During the year following the tax increase, the pretax price of a pack of cigarettes did not increase by as much as it had during the year prior to the tax increase.
B. The one percent fall in cigarette sales in the year prior to tax increase was due to a smaller tax increase.
C. The pretax price of a pack of cigarettes gradually decreased throughout the year before and the year after the tax increase.
D. For the year following the tax increase, the pretax price of a pack of cigarettes were not eight or more cents lower than it had been the previous year.
E. As the after-tax price of a pack of cigarettes rises, the pretax price also rises.
The OA is D
I was torn between A and D. I was more compelled to A because of time constraint, but after looking into the question in detail, both A and D negation does affect the conclusion. Can anyone explain why D is better than A?
Fed. tax on cigarettes CR question
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conclusion: after tax and volume of sales are dependent.
negating a)say during 2009,pretax = 99,in 2010: 100 and in 2011 = 101.
due to 1 cent increase in 2010, sales fell only 1%. Thus with 1 cent increase in 2011, they can't fall 10%.
but with tax price in 2011= 109. 9 cents increase can decrease sales. thus after tax and sales are related. Argument doesn't fall apart.
negating d) 2010 pretax = 100
2011 pretax < 93. (eight or more cents lower)
aftertax <101 or <=100. Thus price person is paying still same and thus sales are after tax shouldn't be related.
negating a)say during 2009,pretax = 99,in 2010: 100 and in 2011 = 101.
due to 1 cent increase in 2010, sales fell only 1%. Thus with 1 cent increase in 2011, they can't fall 10%.
but with tax price in 2011= 109. 9 cents increase can decrease sales. thus after tax and sales are related. Argument doesn't fall apart.
negating d) 2010 pretax = 100
2011 pretax < 93. (eight or more cents lower)
aftertax <101 or <=100. Thus price person is paying still same and thus sales are after tax shouldn't be related.
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A says that it did not increase by as much - now that could simply imply that the increase %age was below it or above it. Hence incorrect
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Yep the above reasoning is correctcans wrote: negating d) 2010 pretax = 100
2011 pretax < 93. (eight or more cents lower)
aftertax <101 or <=100. Thus price person is paying still same and thus sales are after tax shouldn't be related.
Success = Max(Hardwork) + Min(Luck)