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      Question

      Given below is a statement, followed by two possible

      reasons numbered I and II. Read the statement carefully and decide which of the two reasons explains the event/observation/information given in the statement. Statement: Even though fuel prices have gone down, airlines have not cut down on their ticket prices. Reasons: I) Demand of air travel among consumers is several times more than the availability. II) The Government has uplifted all restrictions on the pricing of air tickets.
      A Neither I nor II is a possible reason Correct Answer Incorrect Answer
      B Both I and II are possible reasons Correct Answer Incorrect Answer
      C Only II is a possible reason Correct Answer Incorrect Answer
      D Only I is a possible reason Correct Answer Incorrect Answer

      Solution

      Reason I: Demand of air travel among consumers is several times more than the availability. If demand is very high compared to supply, airlines can maintain high ticket prices even if fuel cost decreases. This explains the statement. Reason II: The Government has uplifted all restrictions on the pricing of air tickets. If there are no price restrictions, airlines are free to set ticket prices as they wish. While this is true, it does not directly explain why prices were not reduced despite lower fuel costs.   This does not explain the event directly.   Answer: Only Reason I explains the statement.

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