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The third paragraph performs which of the following functions in the passage?
It is true that the third paragraph elaborates on modern discoveries in the field discussed by the passage. However, this new information does not support the second paragraph, it contradicts it.
The third paragraph does not present a conclusion, least of all the final conclusion of the passage.
Moreover, we can eliminate this answer choice by looking at the first sentence, even the first word, of the last paragraph: Still. This structure word indicates that the last paragraph has something different to add to what was previously discussed.
The third paragraph does not cite an example, and even if it did, it would not necessarily mean that this is its function, it's purpose. Do not confuse content with structure.
Furthermore, the information in the third paragraph does not support the second paragraph, as this answer choice suggests, but actually presents a different, more up-to-date view of the topic at hand.
The second, third, and fourth paragraph describe steps (phases) in the progression of scientific views over time (chronologically) on the question of water on Mars.
The third paragraph indeed presents information. However, this information does not undermine the last paragraph in any way. The last paragraph discusses an ongoing debate and the information given in the third paragraph is simply one step in this debate.