# Logical Reasoning-Inference (IAS Prelims CSAT Paper-II (Aptitude)): Questions 4 - 5 of 5

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## Passage

It is easy for the government to control State-owned companies through nods and winks. So what really needs to be done as a first step is to put petrol pricing on a transparent formula - if the price of crude is x and the exchange rate y, then every month or fortnight, the government announces a maximum price of petrol, which anybody can work out from the x and the y. The rule has to be worked out to make sure that the oil-marketing companies can, in general, cover their costs. This will mean that if one company can innovate and cut costs, it will make greater profits. Hence, firms will be more prone to innovate and be efficient under this system. Once the rule is announced, there should be no interference by the government. If this is done for a while, private companies will re-enter this market. And once a sufficient number of them are in the fray, we can remove the rule-based pricing and leave it truly to the market (subject to, of course, the usual regulations of anti-trust and other competition laws). (2014)

## Question number: 4 (1 of 2 Based on Passage) Show Passage

» Logical Reasoning » Inference

MCQ▾

### Question

According to the passage, an oil company can make greater profits, if a transparent formula for petrol pricing is announced every fortnight or month, by

1. promoting its sales.

2. undertaking innovation.

3. cutting costs.

4. selling its equity shares at higher prices.

Which of the statements given above is/are correct?

### Choices

Choice (4) Response

a.

1 only

b.

1, 2 and 4

c.

3 and 4

d.

2 and 3

## Question number: 5 (2 of 2 Based on Passage) Show Passage

» Logical Reasoning » Inference

MCQ▾

### Question

According to the passage, private oil companies re-enter the oil producing market if

1. a transparent rule-based petrol pricing exists.

2. there is no government interference in the oil producing market.

3. subsidies are given by the government.

4. regulations of anti-trust are removed.

Which of the statements given above are correct?

### Choices

Choice (4) Response

a.

2 and 4

b.

2 and 3

c.

3 and 4

d.

1 and 2

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