Rereading the passage multiple times has only made me more certain in correctness of my answer. Am I going crazy? [TOEFL Reading]

Personally I don't see any way any answer but A can fit. It repeatedly talks about how it was the natural resources that gave it a competitive edge, explicitly calls out the value of obsidian, of which they had abundance, and that their trade in obsidian seemingly allowed then access to other goods. The very first sentence is "It seems likely that Teotihuacan's natural resources gave the city a competitive edge over it's neighbours."

The passage doesn't say anything about the elite class being stable. Just that they had a prosperous life and may have tried to attract new inhabitants. Meanwhile the very first sentence says that it's likely their natural resources gave them a competitive edge over their neighbors in pretty much the same wording as the question.

I’d have given the answer they marked as correct. The whole point is that their obsidian was valuable and they knew to use this to their advantage. It’s true that it says many other places in the highlands have it (perhaps not everyone mined it? Or perhaps the obsidian on those other places was as-yet undiscovered?), but the overall thrust is that they had access to an important natural resource and used it to extend their wealth and power.

It’s saying that the resources were pivotal in their success and that their elites further increased the potential from these resources.

No, I think you're slightly misinterpreting the point of the sentence and your answer isn't correct. The part about the elite class is written in dashed lines like that to show it's secondary to the main point of the whole sentence. In other words, you should be able to remove it and the sentence should still make sense. If we try this, it makes it more obvious why the first answer is correct: "It seems likely that Teotihuacan's natural resources gave the city a competitive edge over its neighbors." So yes, you're right in pointing out the importance of the elite-class in recognising how useful its resources are but firstly, obsidian is only one of the resources mentioned, there are other natural resources that are useful to Teotihuacan. Secondly though, the elite-class by themselves are not enough for the city to have a competitive edge. Does that make sense?

A is correct. The phrase in dashes is meant to be parenthetical so the sentence can be read without it.  So the sentence states "...natural resources gave the city a competative edge..." which matches answer A. The expression in the dashes "elites ability to recognize potential" implies b *could* be correct, but it also reinforces that the resources were the thing giving the advantage, the elites merely recognised they could give that advantage. I think the answer saying commodity instead of resource is a little misleading though

A is correct. The first sentence alone indicates that natural resources is what the author gives primary credit to. This is demonstrated by placing a secondary credit (the elite’s ability to recognize the potential) in em dashes. Additionally the last paragraph focuses on obsidian mining and the thriving obsidian operation to showcase that resources + smart exploitation lead to the cities success. Finally, B is correct because the excerpt says nothing about the elite being highly stable. It says they recognized the value of obsidian and tried to attract more immigrants for its mining, but that doesn’t necessarily mean they are highly stable.

The passage says nothing about a stable elite.

The key words here are well-exploited. It wasn't just present, they learned how to exploit it to it's highest potential, including trading it over long distances, giving them access to a wide variety of valuable resources. That would definitely give them an edge.

This is a common answer pattern in multiple-choice reading comprehension assessments. I call it "1 truth and 3 lies." Each of the wrong answers is explicitly wrong simply because it states something that was not provided in the passage. (D) mentions "scare" resources in Guatamalan/Mexican highlands when the passage says there was plenty of obsidian in those areas. (C) mentions "knowledge derived directly from" the Olmecs when the passage merely uses the Olmec people as a historic example/marker of time. And your choice, (B), mentions a "highly stable" elite class when the passage merely mentions the "city elite's ability to recognize" that obsidian could be valuable. It's important to avoid doing too much of your own **reasoning** on such assessments; they aren't meant to test your critical thinking in the way that your stated logic suggests. They are trying to measure whether you **understood what you read** at a more basic level—namely, the ability to distinguish between **details the passage expressly provided** and those that **may seem reasonable inferences, but were not stated as such.**

If answer B had said "The city elite's ability to recognize the potential of their natural resources" then you could argue that in some ways that might be more correct than A (although it's not the main focus of the passage, it is mentioned). But as it is, nothing in the passage discusses or mentions stability of the elite, or the importance/relevance of a stable elite class for attaining a competitive edge over their neigbors. You'd have to bring in outside information to select this option. It may be the case that their neighbors may also technically have access to this resource, but evidently they were not able to effectively exploit it. Which is why option A says "well-exploited." Teotihuacan exploited the resource better than their neighbors. The specific reason for this is not clarified by the passage.

A is correct. Sure, they weren't the only ones who had access, and it wouldn't have been much use if they hadn't been canny enough to *leverage* it properly, but on the other hand, it's nearly impossible to leverage a complete lack of valuable resources into a competitive edge no matter *how* organized and cunning your leaders are. Also, I'll point out that you're making quite the assumption that they were the only folks around with an orderly and intelligent elite class. Smart people exist in every society, everywhere on earth and all throughout history (they don't always exist among the elite, but usually some do, or the elite aren't likely to stay elite very long). It's highly unlikely that answer B was something "unique" to them any more than the obsidian was.

I think where you’re struggling is in the phrasing of the first sentence where a competitive edge is mentioned. The separation of the sentence with the sidebar does mention the city’s elite, however, the full sentence could be read without that sidebar to state that the natural resources gave the city the competitive edge. The additional information was that the elite were wise to recognize the resources that gave them the edge, but ultimately it was the resources that gave them that competitive edge, and not that they were elite.

The answer is A. Their natural resource is a commodity (something they can trade). That is their competitive edge… That they have resources. B speaks about a stable elite class… but the article does not mention stability. C and D are… wrong.

So I do understand how you can make this mistake as the sentence break speaks about the city's elite. A general rule of thumb when trying to understand sentences like this for questions is to completely ignore the middle part - also called an em dash - they usually offer useless information for the purpose of the question. Like what I just did with the previous sentence. It just provides a little more information, nothing that important.

The answer to the question is basically contained entirely within the first sentence. It states that the city's natural resources (which we can assume were abundant because that's the only way resources are useful) and the elite's ability to recognize the resources potential (meaning it's well exploited.)