Discussion

Question:

The statement below is followed by three outcomes numbered I, II and II. An outcome is either a step of administrative decision to be undertaken for improvement, or a follow-up for further action, or natural response by stakeholders, etc. on the basis of the information provided in the statement. Everything mentioned in the statement is to be assumed to be true, on the basis of which the most logically followed course of action has to be decided.

Statement:

The city council of Brownwood City has decided to install a plant of mineral water to provide the citizens mineral water bottles at US $ 1 per bottle as against bottles costing US $ 1.5 being sold by local private players.
I. All the local private companies selling bottled water in Brownwood City will have to close their operations.
II. The city council of Brownwood City will have to provide for the losses from this project in its budget.
III. The normal tap water supply of Brownwood City will have no takers and that will have to be discontinued.

Explanation:

Outcome I does not follow; just because mineral water will be sold at a cheaper rate by the city council, this does not mean that all private companies selling bottled mineral water will close down altogether.
Outcome II does not follow; since their increased sales will probably more than make up for any losses incurred due to lower prices.
Outcome III does not follow; it is ludicrous to assume that people will be willing to do away with normal tap water just because mineral water is being sold at a somewhat reasonable rate.
Hence, the correct answer is option 1.

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