Does not violate. The regulation states that, if most people know that bran flakes do not normally contain fat, Lester’s Bran Flakes cannot label their product “nonfat.” Lester’s does not do so and thus is in compliance with this regulation.

Does not violate. The regulation doesn’t describe situations in which a company must label a product “nonfat,” so Lester’s isn’t in violation by choosing not to do so. Note that “labeled ‘nonfat’” is a sufficient condition, so negating it (as (B) does) cannot yield a violation.

Does not violate. The entire stimulus and the conditional logic it presents take place in the domain of “food that does not ordinarily contain fat.” This answer choice takes us out of the domain—if garlic baguettes normally contain fat, the regulation has no bearing on them.

Violates the regulation. As shown below, “most people mistakenly believe the food to be fatty” is a necessary condition of “labeled ‘nonfat’”. Since Lester’s Applesauce fails the necessary, it would have to also fail the sufficient in order to comply with the regulation.

Does not violate. As long as most people mistakenly believe that a food ordinarily contains fat, a company is allowed to label it “nonfat.” So Lester’s is in compliance with the regulation!