Erin Reinhardt and her friend Carol Newman have just arrived in the country Boloni for a summer holiday. While renting a car on their first day in Boloni they notice that the car rental rates are so much higher than rates back home. Carol says that in a matter of time, competition should drive prices down. Erin feels that the market for car rentals is probably competitive enough; it could just be high cost of operations in Boloni that are responsible for the high prices.

Which of the following, if true, would weaken Carol's argument that competition will drive prices down?

A. The car rental industry recently implemented no-show fees for customers who do not pick up their cars after making a reservation.
B. Information on car rental rates being easily available, it is almost impossible for firms to charge different consumers different prices.
C. To reduce emissions, the government has recently introduced tax per mile driven on automobiles.
D. Compared to Carol's home country, people in Boloni have lower purchasing power.
E. The government of Boloni set aside a substantial amount of money this year for the construction of freeways.

Here in this given comprehension, Carol profess that entry of new organization in market will further lead to reduction in prices. However, new tax introduced by authorities will therefore increase costs for organization in industry. Therefore, we could state that even though there are new firms entering, this does not necessarily mean prices will fall.

i.e. To reduce emissions, the government has recently introduced tax per mile driven on automobiles, if true, would weaken Carol's argument that competition will drive prices down