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

It is currently 20 Aug 2014, 10:32

Flash Sale:

The Economist GMAT Tutor - 15% Off All Courses


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:
Intern
Intern
avatar
Joined: 01 May 2009
Posts: 41
Followers: 1

Kudos [?]: 3 [0], given: 0

For several years, per capita expenditure on prescription [#permalink] New post 07 Aug 2009, 05:31
1
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  35% (medium)

Question Stats:

59% (02:04) correct 41% (01:19) wrong based on 298 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.

I cannot get my head round the reasonings of the OA. No matter how I look at it, D seems the best answer. If D is true, wouldn’t per capita expenditure of drugs increase?
[Reveal] Spoiler: OA

Last edited by WoundedTiger on 29 Jul 2014, 22:00, edited 1 time in total.
GMAT prep Q. OA updated
2 KUDOS received
Manager
Manager
avatar
Joined: 07 Jul 2009
Posts: 230
Followers: 3

Kudos [?]: 41 [2] , given: 13

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 07 Aug 2009, 10:29
2
This post received
KUDOS
I would go with A.

Although manufacturers did not increase price of their existing products, but they replaced existing ones with new medications, which cost more. Even though there is no expansion in use of prescription drugs, still per capita expenditure for prescription drugs continued to increase by a substantial percentage each year.

In D, if doctor’s prescribe generic drugs which are cheaper than expensive brand-names then how would it justify the increase in per capita expenditure for prescription drugs. It will in fact decrease per capita expenditure for prescription drugs.
1 KUDOS received
Intern
Intern
avatar
Joined: 30 Jul 2009
Posts: 41
Followers: 0

Kudos [?]: 21 [1] , given: 1

Re: For several years, per capita expenditure on prescription [#permalink] New post 07 Aug 2009, 10:34
1
This post received
KUDOS
A. After price increases were prohibited, drug manufacturers concentrated on producing new medications to replace existing products - this has no effect on per capita expenditure

B. The population of Voronia rose steadily throughout the period - this would decrease per capita expenditure

C. Improvements in manufacturing processes enable drug manufacturers to maintain high profit levels on drugs despite the price freeze. - nothing to do with increase in per capita expenditure

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
- people would have started to buy less expensive generic medicine and per capita expenditure would have gone done, therfore government's action would have worked. BUt the q is why government's action didn't work.

E. After price increases were prohibited, some foreign manufacturers of expensive drugs ceased marketing them in Voronia. - as the usage of prescription drug didn't change, people would have started to buy these drugs outside voronia and pay additional shipping costs eventually rising the per capita expenditure. So the governmet's action didn't work.


Whats OA ?
Manager
Manager
avatar
Status: Applying
Joined: 18 Jul 2009
Posts: 159
Location: United Kingdom
Concentration: General Management, Strategy
GPA: 3.65
WE: Consulting (Telecommunications)
Followers: 1

Kudos [?]: 10 [0], given: 6

Re: For several years, per capita expenditure on prescription [#permalink] New post 07 Aug 2009, 19:56
IMO A..

If the Gov froze the prices only for certain drug then this holds....
Director
Director
avatar
Joined: 05 Jun 2009
Posts: 852
WE 1: 7years (Financial Services - Consultant, BA)
Followers: 8

Kudos [?]: 179 [0], given: 106

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 07 Aug 2009, 23:32
A for me.
_________________

Consider kudos for the good post ... :beer
My debrief : journey-670-to-720-q50-v36-long-85083.html

Senior Manager
Senior Manager
avatar
Joined: 26 May 2009
Posts: 317
Followers: 2

Kudos [?]: 35 [0], given: 13

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 08 Aug 2009, 23:11
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 - per capita comparision so doesnt make a difference
C. Improvements in manufacturing processes enable drug manufacturers to maintain high profit levels on drugs despite the price freeze. -- talking abt expenditure and not profit
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 - how does this explain the rise in per capita.
E. After price increases were prohibited, some foreign manufacturers of expensive drugs ceased marketing them in Voronia. - out of scope
Intern
Intern
User avatar
Joined: 25 Jul 2009
Posts: 44
Followers: 0

Kudos [?]: 2 [0], given: 0

Re: For several years, per capita expenditure on prescription [#permalink] New post 09 Aug 2009, 01:26
Alll the answer choices are equally bad :P
I will vote for E.
Please post the OA
Manager
Manager
avatar
Joined: 05 Jul 2009
Posts: 182
Followers: 1

Kudos [?]: 14 [0], given: 5

Re: For several years, per capita expenditure on prescription [#permalink] New post 09 Aug 2009, 02:18
IMO...E, according to learner's explanation.

'A' would have been the answer if it was stated that the new medicines are more expensive than those currently existing in the market. 'B' and 'D' would decrease the per capita expenditure, and c is irrelevant, leaving us with 'E'. However, 'E' needs too much assumptions.

What is the OA?
Intern
Intern
avatar
Joined: 01 May 2009
Posts: 41
Followers: 1

Kudos [?]: 3 [0], given: 0

Re: For several years, per capita expenditure on prescription [#permalink] New post 09 Aug 2009, 05:44
OA is A...

Can't believe we are bullied into taking A as an answer...

It's not convincing (to me at least)...
Manager
Manager
avatar
Joined: 05 Jul 2009
Posts: 182
Followers: 1

Kudos [?]: 14 [0], given: 5

Re: For several years, per capita expenditure on prescription [#permalink] New post 09 Aug 2009, 18:18
What is the source? I am also not convinced with 'A' being the answer.
Manager
Manager
avatar
Joined: 21 Jun 2009
Posts: 156
Followers: 3

Kudos [?]: 8 [0], given: 1

Re: For several years, per capita expenditure on prescription [#permalink] New post 09 Aug 2009, 20:19
shady...A
Director
Director
avatar
Joined: 05 Jun 2009
Posts: 852
WE 1: 7years (Financial Services - Consultant, BA)
Followers: 8

Kudos [?]: 179 [0], given: 106

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 10 Aug 2009, 00:02
getMBA already gave nice explanation for A.

Total drugss sold same.
per capita increased ==> cost of drugs increased
price of old drugs, drugs already existed in the market, not increased

How is that possible? New drugs have the higher prices than older ones reulting in per-capita expense on drugs to increase.
_________________

Consider kudos for the good post ... :beer
My debrief : journey-670-to-720-q50-v36-long-85083.html

Manager
Manager
avatar
Joined: 05 Jul 2009
Posts: 182
Followers: 1

Kudos [?]: 14 [0], given: 5

Re: For several years, per capita expenditure on prescription [#permalink] New post 10 Aug 2009, 01:05
Nowhere it was specifically mentioned that the new drugs will be more expensive....so I was confused with A.
SVP
SVP
avatar
Joined: 16 Jul 2009
Posts: 1634
Schools: CBS
WE 1: 4 years (Consulting)
Followers: 30

Kudos [?]: 220 [0], given: 2

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 08 Sep 2009, 12:45
eresh wrote:
Nowhere it was specifically mentioned that the new drugs will be more expensive....so I was confused with A.


In fact, is not necessary that the new drugs are more expensive. What it matters here is that are new drugs--> more expenditure.
_________________

The sky is the limit
800 is the limit


Get the best GMAT Prep Resources with GMAT Club Premium Membership

Manager
Manager
User avatar
Joined: 10 Jul 2009
Posts: 131
Location: Ukraine, Kyiv
Followers: 2

Kudos [?]: 29 [0], given: 60

Re: For several years, per capita expenditure on prescription [#permalink] New post 01 Nov 2009, 10:16
Quite a challenging question.

I picked initially D, but when saw the OA was very confused.

good reasoning is provided by MGMAT staff here:

http://www.manhattangmat.com/forums/for ... t2413.html
_________________

Never, never, never give up

Senior Manager
Senior Manager
avatar
Joined: 16 Jul 2009
Posts: 267
Followers: 2

Kudos [?]: 33 [0], given: 3

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 02 Nov 2009, 08:42
Would go with A..
Intern
Intern
avatar
Joined: 28 Apr 2009
Posts: 48
Followers: 0

Kudos [?]: 6 [0], given: 2

Re: For several years, per capita expenditure on prescription [#permalink] New post 11 Nov 2009, 16:08
I would go with A as well.

As far as your reasoning is concerned 'stopping to market' doest not necessarily mean 'stopping to sell'

learner wrote:
A. After price increases were prohibited, drug manufacturers concentrated on producing new medications to replace existing products - this has no effect on per capita expenditure

B. The population of Voronia rose steadily throughout the period - this would decrease per capita expenditure

C. Improvements in manufacturing processes enable drug manufacturers to maintain high profit levels on drugs despite the price freeze. - nothing to do with increase in per capita expenditure

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
- people would have started to buy less expensive generic medicine and per capita expenditure would have gone done, therfore government's action would have worked. BUt the q is why government's action didn't work.

E. After price increases were prohibited, some foreign manufacturers of expensive drugs ceased marketing them in Voronia. - as the usage of prescription drug didn't change, people would have started to buy these drugs outside voronia and pay additional shipping costs eventually rising the per capita expenditure. So the governmet's action didn't work.


Whats OA ?
1 KUDOS received
Intern
Intern
avatar
Joined: 06 Nov 2010
Posts: 13
Followers: 0

Kudos [?]: 1 [1] , given: 10

Re: For several years, per capita expenditure on prescription [#permalink] New post 14 Nov 2010, 03:43
1
This post received
KUDOS
A it is

This was an easy one but others are really hard.
CR is the most difficult in verbal
i get only 40% correct answers.
SVP
SVP
avatar
Joined: 16 Jul 2009
Posts: 1634
Schools: CBS
WE 1: 4 years (Consulting)
Followers: 30

Kudos [?]: 220 [0], given: 2

GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 14 Nov 2010, 04:27
adityajawa wrote:
A it is

This was an easy one but others are really hard.
CR is the most difficult in verbal
i get only 40% correct answers.


Best of luck for tomorrow!

Keep us informed!
_________________

The sky is the limit
800 is the limit


Get the best GMAT Prep Resources with GMAT Club Premium Membership

Manager
Manager
avatar
Joined: 11 Jul 2010
Posts: 229
Followers: 1

Kudos [?]: 39 [0], given: 20

GMAT ToolKit User GMAT Tests User
Re: For several years, per capita expenditure on prescription [#permalink] New post 14 Nov 2010, 07:02
sly:)... they found the loophole.

Law says: you can't increase the price.

Businessman: ok. I will manufacture a new product (with slight changes) and put it in the market and charge a high price to begin with - then the price ceiling can't stop me from charging the price I want.
Re: For several years, per capita expenditure on prescription   [#permalink] 14 Nov 2010, 07:02
    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
8 For several years, per capita expenditure on prescription naruphanp 7 09 Aug 2012, 01:10
For several years, per capita expenditure on prescription eybrj2 3 28 Nov 2011, 22:57
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  

Go to page    1   2   3    Next  [ 44 posts ] 



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®.