We can rule out A and C and I understand both. The obvious answer to me thats left is choice B, which is incorrect. I don't understand how you can clearly state that rolling resistance is reduced and fuel efficiency is unaffected. I know this to be true. The answer key states that the efficiency of the engine is independent of the tires. There are obviously more factors that affect fuel efficiency other than the engine, such as aerodynamics.
I see that higher air pressure might not be required due to the new circumstances from the passage, but this doesn't seem as good of an answer as B. Harder rubber will intuitively required more air pressure due to is resistance to deform.
Show me the light.