With decreased production this year in many rice–growing countries, prices of the grain on world markets have increas...

Farnoush on October 21, 2019

Why C?

Hi why C and not B or D?

1 Reply

on October 21, 2019

Hello @farnoushsalimian,

The analysts argue that a slight change in production can significantly affect the amount of rice available in world markets. (Small decrease in production leads to high prices.) Why? Because governments control most of the rice, leaving only a small percentage available for commercial sale.

We are tasked with questioning their explanation. In other words, we need to show that government control of rice is not the reason for the price increase.

You asked about B and D.

B actually strengthens the analysts' argument. If the government hoards more rice during times of low production, then the scarcity in the market could be even worse. If locals aren't getting rice from their government, demand for commercial rice could increase, which would raise the price further.

D would have the same effect as B. If governments (which already control most rice) start buying it from the market as well, then they contribute further to the scarcity of commercial rice. This would lead to higher prices, which supports the analysts' argument.

C is correct because the government creates an effect opposite of B or D. Rather than control more rice, they sell their rice commercially. This puts more rice on the world market, which would alleviate the scarcity to some degree.