CAT Verbal Ability Questions | CAT Critical Reasoning questions
CAT/1999
Question . 15
Directions for Questions: Read the information in each question given below and answer the question that follows:
Cigarettes constitute a mere 20% of tobacco consumption in India. And fewer than 15% of the 200 million tobacco users consume cigarettes. Yet this 15% contribute nearly 90% of the tax revenues to the Exchequer from the tobacco sector. The punitive cigarette taxation regime has kept the tax base narrow, and reducing taxes will expand this base.
Which one of the following best bolsters the conclusion that reducing duties will expand the tax base?
A : The cigarette manufacturers’ association has decided to indulge in the aggressive promotion.B : There is a likelihood that tobacco consumers will shift to cigarette smoking if cigarette prices were to reduce.C : The cigarette manufacturers are lobbying for a reduction in duties.D : An increase in duties on non-cigarette tobacco may lead to a shift in favour of cigarette smoking.
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Method of solving this CAT Verbal Ability Question from Critical Reasoning question
(b) As reducing taxes will reduce the price of cigarettes. Thus tobacco consumers will shift to cigarette smoking will bolster the conclusion.