Find all School-related info fast with the new School-Specific MBA Forum

It is currently 28 Jul 2014, 02:35

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

For several years, per capita expenditure on prescription

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
1 KUDOS received
Intern
Intern
avatar
Joined: 09 May 2012
Posts: 17
Location: Thailand
Concentration: Finance, Economics
GMAT Date: 08-30-2012
GPA: 2.64
WE: Research (Retail Banking)
Followers: 0

Kudos [?]: 12 [1] , given: 3

For several years, per capita expenditure on prescription [#permalink] New post 09 Aug 2012, 01:10
1
This post received
KUDOS
00:00
A
B
C
D
E

Difficulty:

  35% (medium)

Question Stats:

59% (02:40) correct 41% (01:42) wrong based on 117 sessions
For several years, per capita expenditure on prescription drugs in Voronia rose by fifteen percent or more annually. In order to curb these dramatic increases, the ministry of health prohibited drug manufacturers from raising any of their products’ prices. Even though use of prescription drugs did not expand after this price freeze, per capita expenditure for prescription drugs continued to increase by a substantial percentage each year.
Which of the following, if true, most helps to explain why the ministry’s action did not achieve its goal?

A. After price increases were prohibited, drug manufacturers concentrated on producing new medications to replace existing products
B. The population of Voronia rose steadily throughout the period.
C. Improvements in manufacturing processes enable drug manufacturers to maintain high profit levels on drugs despite the price freeze.
D. In addition to imposing a price freeze, the government encouraged doctors to prescribe generic versions of common drugs instead of the more expensive brand-name versions
E. After price increases were prohibited, some foreign manufacturers of expensive drugs ceased marketing them in Voronia.
[Reveal] Spoiler: OA
3 KUDOS received
Director
Director
User avatar
Status: Final Countdown
Joined: 17 Mar 2010
Posts: 564
Location: India
GPA: 3.82
WE: Account Management (Retail Banking)
Followers: 11

Kudos [?]: 123 [3] , given: 75

Re: GMATPrep CR #8 : need help/explanation [#permalink] New post 09 Aug 2012, 02:32
3
This post received
KUDOS
Assume, there were 100 different types of medicines available in the market on which govt. froze the prices(that a particular drug will cost $X, and no chemist or druggist can charge more than the fixed price on the drug).It is also mentioned that the consumption of drugs stayed constant.Then how can the per capita expenditure for prescription drugs continued to increase by a substantial percentage each year?

May possible that the drug manufacturers started making more variety of drugs.(The listed drugs were 100 now 150; 50 new varieties are in market , and govt is unaware of those 5o drugs but the chemists are charging more and more for those new medicines.)hence per capita expenditure for prescription drugs continued to increase by a substantial percentage each year.
_________________

" Make more efforts "
Press Kudos if you liked my post

1 KUDOS received
Intern
Intern
avatar
Joined: 09 May 2012
Posts: 17
Location: Thailand
Concentration: Finance, Economics
GMAT Date: 08-30-2012
GPA: 2.64
WE: Research (Retail Banking)
Followers: 0

Kudos [?]: 12 [1] , given: 3

Re: GMATPrep CR #8 : need help/explanation [#permalink] New post 09 Aug 2012, 02:42
1
This post received
KUDOS
oh i get it. So the gov only restricted the price increase for 'current' drugs produced by the drug company. So technically the drug company could produce 'new' drugs and charge however much they want for it?
Thanks thevenus
1 KUDOS received
Director
Director
User avatar
Status: Final Countdown
Joined: 17 Mar 2010
Posts: 564
Location: India
GPA: 3.82
WE: Account Management (Retail Banking)
Followers: 11

Kudos [?]: 123 [1] , given: 75

Re: GMATPrep CR #8 : need help/explanation [#permalink] New post 09 Aug 2012, 02:44
1
This post received
KUDOS
naruphanp wrote:
oh i get it. So the gov only restricted the price increase for 'current' drugs produced by the drug company. So technically the drug company could produce 'new' drugs and charge however much they want for it?
Thanks thevenus


Absolutely right !
your kudos is always welcome !
_________________

" Make more efforts "
Press Kudos if you liked my post

Manager
Manager
User avatar
Joined: 31 Aug 2011
Posts: 209
Followers: 2

Kudos [?]: 43 [0], given: 44

CAT Tests
Re: GMATPrep CR #8 : need help/explanation [#permalink] New post 10 Aug 2012, 06:28
well E can be a good option but required farther leap than a . if foreign manufactureres charged less than domestic for these drugs then after they went out, avg prices could increase . in A it is nowhere mentioned that the regulation was for existing drugs only but the newer ones might be costlier than existing ones, this also requires a further leap than what is mentioned . .

The point i want to make is that in such ques on CR where two answers are possible both require a further leap from whats stated, how to select the correct answer ?? is there any strategy ? expert reply will be higly appreciated .
_________________

If you found my contribution helpful, please click the +1 Kudos button on the left, I kinda need some =)

Current Student
avatar
Status: Now or never
Joined: 07 Aug 2010
Posts: 326
Location: India
Concentration: Strategy, Technology
GPA: 3.5
WE: Consulting (Consulting)
Followers: 7

Kudos [?]: 124 [0], given: 26

GMAT Tests User Premium Member
Re: GMATPrep CR #8 : need help/explanation [#permalink] New post 11 Aug 2012, 23:22
thevenus wrote:
Assume, there were 100 different types of medicines available in the market on which govt. froze the prices(that a particular drug will cost $X, and no chemist or druggist can charge more than the fixed price on the drug).It is also mentioned that the consumption of drugs stayed constant.Then how can the per capita expenditure for prescription drugs continued to increase by a substantial percentage each year?

May possible that the drug manufacturers started making more variety of drugs.(The listed drugs were 100 now 150; 50 new varieties are in market , and govt is unaware of those 5o drugs but the chemists are charging more and more for those new medicines.)hence per capita expenditure for prescription drugs continued to increase by a substantial percentage each year.


How is the price of drug and expenditure related?
_________________

Please press KUDOS if you like my post

2 KUDOS received
Senior Manager
Senior Manager
User avatar
Joined: 13 Aug 2012
Posts: 464
Concentration: Marketing, Finance
GMAT 1: Q V0
GPA: 3.23
Followers: 14

Kudos [?]: 179 [2] , given: 11

GMAT ToolKit User GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 02 Feb 2013, 03:26
2
This post received
KUDOS
For several years, per capita expenditure on prescription drugs in Voronia rose by fifteen percent or more annually. In order to curb these dramatic increases, the ministry of health prohibited drug manufacturers from raising any of their products’ prices. Even though use of prescription drugs did not expand after this price freeze, per capita expenditure for prescription drugs continued to increase by a substantial percentage each year.
Which of the following, if true, most helps to explain why the ministry’s action did not achieve its goal?

A. After price increases were prohibited, drug manufacturers concentrated on producing new medications to replace existing products
Any of the existing products cannot have increased price. But if there were more new products introduce, then perhaps these contributed to the increase in per capita presc. drug prescription. Sneak manufacturers! CORRECT!

B. The population of Voronia rose steadily throughout the period.
Since it is about the per capita, then the total population doesn't matter. And say this increase are non-prescription users, then that would not explain the increase in per capita...

C. Improvements in manufacturing processes enable drug manufacturers to maintain high profit levels on drugs despite the price freeze.
Profits are irrelevant.

D. In addition to imposing a price freeze, the government encouraged doctors to prescribe generic versions of common drugs instead of the more expensive brand-name versions
This should decrease rather than increase...

E. After price increases were prohibited, some foreign manufacturers of expensive drugs ceased marketing them in Voronia.
This should decrease rather than increase

Answer: A
_________________

Impossible is nothing to God.

Manager
Manager
avatar
Status: Time to apply!
Joined: 24 Aug 2011
Posts: 221
Location: India
Concentration: Finance, Entrepreneurship
GMAT 1: 600 Q48 V25
GMAT 2: 660 Q50 V29
GMAT 3: 690 Q49 V34
GPA: 3.2
WE: Engineering (Computer Software)
Followers: 3

Kudos [?]: 22 [0], given: 166

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 03 Sep 2013, 07:56
mbaiseasy wrote:
For several years, per capita expenditure on prescription drugs in Voronia rose by fifteen percent or more annually. In order to curb these dramatic increases, the ministry of health prohibited drug manufacturers from raising any of their products’ prices. Even though use of prescription drugs did not expand after this price freeze, per capita expenditure for prescription drugs continued to increase by a substantial percentage each year.
Which of the following, if true, most helps to explain why the ministry’s action did not achieve its goal?

A. After price increases were prohibited, drug manufacturers concentrated on producing new medications to replace existing products
Any of the existing products cannot have increased price. But if there were more new products introduce, then perhaps these contributed to the increase in per capita presc. drug prescription. Sneak manufacturers! CORRECT!

B. The population of Voronia rose steadily throughout the period.
Since it is about the per capita, then the total population doesn't matter. And say this increase are non-prescription users, then that would not explain the increase in per capita...

C. Improvements in manufacturing processes enable drug manufacturers to maintain high profit levels on drugs despite the price freeze.
Profits are irrelevant.

D. In addition to imposing a price freeze, the government encouraged doctors to prescribe generic versions of common drugs instead of the more expensive brand-name versions
This should decrease rather than increase...

E. After price increases were prohibited, some foreign manufacturers of expensive drugs ceased marketing them in Voronia.
This should decrease rather than increase

Answer: A


But for (a) , once the manufacturers make new replaced drugs , these no more remain as prescribed drugs right?
Then how does per capita expenditure for prescription drugs still continue to increase?
_________________

Didn't give up !!! Still Trying!!

Re: For several years, per capita expenditure on prescription   [#permalink] 03 Sep 2013, 07:56
    Similar topics Author Replies Last post
Similar
Topics:
1 Experts publish their posts in the topic For several years, per capita expenditure on prescription Shawshank 5 21 Aug 2012, 23:36
For several years, per capita expenditure on prescription eybrj2 3 28 Nov 2011, 22:57
7 Experts publish their posts in the topic For several years, per capita expenditure on prescription cialit0506 42 07 Aug 2009, 05:31
For several years, per capita expenditure on prescription tennis_ball 7 27 Nov 2006, 05:12
Per-capita income last year was $25000. Per-capita income is chunjuwu 5 16 Feb 2005, 02:39
Display posts from previous: Sort by

For several years, per capita expenditure on prescription

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.