In response to declining water levels in the city's

Solution

The municipal corporation tried bans and awareness pamphlets, but consumption did not drop. They have now turned to a "drought surcharge" (a financial penalty) to achieve their goal of reducing water use. This decision is based on the assumption that a monetary cost or financial disincentive will successfully motivate people to change their behavior and conserve water. Thus, statement 1 is an assumption. Statement 2 is incorrect as it is an extreme claim. The passage describes this as a "consequent" step, but it doesn't assume it is the only possible solution in existence. Statement 3 is incorrect because the authorities distributed the pamphlets to promote the technique, but their decision to impose a surcharge does not rely on the assumption that everyone can harvest rain; it relies on the hope that people will simply use less tap water. Hence, option (A) is the correct answer.