Hope this helps. Question stem: 10% UP in price => 4% DOWN in cigarette sales; Now tax up 9 cents on the price of 90 cents => 10% UP in price (9 cents /90 cents = 10%). So 4% down in cigarette sales is highly possible. The logic link: the relation between price increase and sales(down). Assumtion: In order to reach the conclusion that the sales will go down, the price will need to increase. A. Cigarette cmopanies will not decrease the price of the cigarettes ( price of cigarettes =cost per pack to consumers) . This is the correct choice because the price is confirmed to increase, thus the sales will go down. B. In the past, Tax up => cigarette Price up. This choice is Irrelavent because we only concern about the relationship between price and sales. Also, the past normally has nothing to do with current situations. C. More/ increase # of people quit smoking => Down in cigarette sales. This choice is also irrelavent because it doesn't say about the relationship between price and sales. D. current tax a pack of cigarettes < 10 % of the total selling price. This choice is irrelavent because it doesn't say about the relationship between price and sales. E. The # of people who smoke is about the same. The choice is also irrelavent because it doesn't say about the relationship between price and sales.
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