Logical Reasoning - Statement and Assumption - Discussion

In each question below is given a statement followed by three assumptions numbered I, II and III. You have to consider the statement and the following assumptions, decide which of the assumptions is implicit in the statement and choose your answer accordingly.


Statement: The company has decided to increase the price of all its products to tackle the precarious financial position.


  1. The company may be able to wipe out the entire losses incurred earlier by this decision.
  2. The buyers may continue to buy its products even after the increase.
  3. The company has adequate resources to continue production for few more months.

[A]. Only I and III are implicit
[B]. Only II is implicit
[C]. Only II and III are implicit
[D]. None is implicit
[E]. None of these

Answer: Option A


It is mentioned that the company has taken the decision to make up for the financial deficit. So, I is implicit. The response of the buyers to the increased prices cannot be deduced from the statement. So, II is not implicit. Since the company seeks to improve its financial position by increasing the prices of its products, so III is also implicit.

B786 said: (Jun 23, 2013)  
Its just increasing the price there is nothing mentioned about future manufacturing.

Jaydev said: (Oct 1, 2014)  
There is nothing said about any deficit or losses in the statement. Assumption I doesn't implied. Same way, there are no words regarding any production schedule of the company. Neither it can be inferred from the statement. Assumption III also doesn't imply.

You have explained that response of the buyers can't be deduced from the statement; in fact, we are not supposed to DEDUCE here; it IS an ASSUMPTION on part of the company that buyers will purchase their products after price rise.

Paula said: (Sep 16, 2015)  
There is nothing in the statement indicating how many resources are available to the company or, how long they will remain viable this is especially so, considering the use of the word "precarious" in the original statement.

Ben said: (Aug 7, 2016)  
What should be the answer?

All are implicit I suppose?

Binoy said: (Feb 20, 2020)  
Dude precarious means likely to fall or collapse. Which means they were in loss so first is implicit. And the second option is too implicit. Third is not but we do not have the option for one and two together so the answer is none of these which is E.

Rubbal said: (Jun 19, 2020)  
1 and 2 are correct.

So option 5 is correct.

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