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 Post subject: CR II, Book IX, pg 94, #78
PostPosted: Thu Feb 02, 2012 3:29 pm 
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"The Soviet blockade of West Berlin following World War II has widely been acclaimed as a failure. The goal of the blockade was to restrict the supply of commodities in West Berlin. If the blockage had been successful, the wholesale price of commodities such as potatoes, sugar, and milk would not have dropped substantially during the blockade."

The argument in the passage depends on which of the following assumptions?

(A) The supply of commodities available in West Berlin dropped substantially during the blockade.

(B) The price paid for most commodities by the average consumer in West Berlin increased during the blockade.

(C) Shortly after the blockade began, Allied forces began an airlift of commodities that flew over 1,500 flights per day into West Berlin.

(D) The wholesale price of a few commodities skyrocketed in West Berlin during the Soviet blockade.

(E) A substantial drop in the demand for common commodities was not the sole cause of the drop in their wholesale price.

Could you please verify my reasoning:

The author's conclusion that the price of commodities would not have dropped had the blockade been succesful can ONLY be true if we know that these prices are driven by changes in supply (perhaps along with other factors as well).
E is the correct answer choice because it tells us that during the failed blockade the prices of the commodities were NOT ONLY driven by changes in demand, meaning that, by a process of elimination, they must have been driven by supply AS WELL. Thus the supply (along with demand) must have also determined the prices of the commodities had the blockade been successful, implying that the scarcity of the commodities would have pushed their prices up. Thanks!


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 Post subject: Re: CR II, Book IX, pg 94, #78
PostPosted: Thu Feb 02, 2012 5:08 pm 
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Joined: Thu Feb 12, 2009 6:32 pm
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You are correct. Since the price of commodities did not increase, the supply was not negatively affected.


Since prices are driven by supply and demand, we also have to assume that the price drop (or lack of increase) was not caused by a drop in demand.


-Veritas Help


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