The fact that the elderly man is on a street in a city doesn't imply he is outside a diner.
This justifies what answer for what question? Q & A:
Premise: "An elderly man wearing a hat is reading a newspaper on a street in a city."
Hypothesis: "An old man reads a newspaper outside a diner on a city street."
Do we know that the hypothesis entailed by the premise?
it is not possible to tell