This question gives us another local rule, and you should always draw local rules.
(Scroll down for diagrams + explanation)
If Mannequin 1 wears the N jacket, then they must wear the red hat, thanks to the first and second rules.
One of Mannequin 1’s hat or jacket always has to be red, otherwise they would wear all three colors.
This means A and B are wrong. Mannequin 1 can’t wear yellow, because they are wearing red and navy.
C is wrong because Mannequin 1 must wear the red hat. So Mannequin 2 can’t wear it.
D is tricky. There’s normally nothing wrong with Mannequin 2 wearing a yellow hat.
It’s the jacket that’s the problem. It can’t be yellow, because the hat and jacket must be different colors. The jacket can’t be navy, because mannequin 1 is wearing the navy jacket.
And the jacket can’t be red, because then mannequin 2 would be wearing all three colors.
E is CORRECT.
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