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CR GMATPREP [#permalink] New post 22 Jul 2006, 14:15
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I disagree with the correct this question. I think you have to assume outside the argument. Basically what you would have to assume is that the price controls didn't apply to new medicatons which isn't given in the question. Total BS!
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 [#permalink] New post 22 Jul 2006, 14:19
B/w A and B, I would go with A, as it explains the increase in per capita expenditure. B explains the 'total expenditure' on medications, not the 'per capita' expenditure.
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 [#permalink] New post 22 Jul 2006, 14:30
paddyboy wrote:
B/w A and B, I would go with A, as it explains the increase in per capita expenditure. B explains the 'total expenditure' on medications, not the 'per capita' expenditure.


A by POE.. With A, we still have to make one more assumption - the new drugs produced are priced higher ..

Actually B doesn't explain at all as the argument says "use of prescription drug didn't expand"..
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 [#permalink] New post 22 Jul 2006, 14:52
I was thinking with B, the rate of increase use on a per person basis did not increase, but since the population increased, the per capita (which is measurement per househould irrespective of number of people) increased and hence costs increased

Either way, the question sucked and is not a quality question
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 [#permalink] New post 23 Jul 2006, 06:14
jamesrwrightiii wrote:
I was thinking with B, the rate of increase use on a per person basis did not increase, but since the population increased, the per capita (which is measurement per househould irrespective of number of people) increased and hence costs increased

Either way, the question sucked and is not a quality question


In terms of the national census, you are correct. But nowhere in the passage does it say that per capita refers to "per household," therefore we must draw a conclusion based only on the information given.

B doesn`t solve the paradox becuase it just claims that the population expanded. A, on the other hand, implies that the newer drugs were more much suitable for the local market, which in turn spent more for the improved (newer) medications.
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 [#permalink] New post 23 Jul 2006, 10:09
Can we think this way:

per capita expenditure = total expenditure / total people (or household)

if total people increased, then per capital should come down, because it is the denominator

Since per capita expenditure increased, the neomarator (forgive my spelling) total expenditure should increase. Hence it cannot be B.

The only other valid option is A.
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 [#permalink] New post 24 Jul 2006, 03:16
I think it is A.

Made the same mistake when I attempted the question but I understand the problem now.

Basically the goverment put a freeze on the price increase of existing medicines.
The only way pharma companies can beat this freeze and still make a profit is to manufactur new products to replace existing medicines. Since the freeze applies to existing medicines not new medicines, the pharma companies can ask whatever price they want.
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 [#permalink] New post 08 Aug 2006, 04:59
Yes A but with an assumption that the new medicines are priced higher...
  [#permalink] 08 Aug 2006, 04:59
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