How will the right answer fit in terms of support and conclusion?

Only the right answer will support the conclusion in the prompt that the “apparent paradox” can be resolved.

Highlight the main conclusion in the passage, if there is one:

There is no conclusion in the passage, since nothing actually supports anything else. You can imagine the conclusion getting added to the end: “But there isn’t really a paradox, because [RIGHT ANSWER].

[BACKGROUND]. [BACKGROUND]. But even though [SUPPORT], [SUPPORT].

Map the wording of the answers to the wording of the passage:

(A) At the end of the 1800s…

Stop. The passage only talks about “the period from 1840 to 1860”. Nothing from after that timeframe matters much to us.

(B) The prices of wool…decreased dramatically…

The passage says “the family generated more income from selling their wool”, and you can’t argue with the facts in the passage. These price drops must not have mattered much, and so neither does this answer.

(C) …certain other products product by all Australian sheep farmers…

This fills in the author’s blind spot really nicely. This family did better on “wool”, but didn’t do better overall. So things must have been not so hot in some other area. And this answer is calling that out exactly. Aaand, notice the strong wording that leaves no doubt the family in the passage is included in this group.

(D) Competition in wool sales increased…

Just like (B), this must not have been that big a deal, since “the family generated more income from selling their wool”. This doesn’t add anything new about why “they failed to enjoy a commensurate increase in prosperity”.

(E) …the percentage who made their living exclusively from international wool sales…

Just because there’s more international competition doesn’t explain why “they failed to enjoy a commensurate increase in prosperity.” You’d have to add in your own assumption about how those things connect, an assumption that’s more than just common sense. If you catch yourself doing that, you know you’re looking at a wrong answer.

(C) is the correct answer.