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05 Oct 2020, 01:15
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
45%
(medium)
Question Stats:
67% (01:50) correct
33%
(02:00)
wrong
based on 217
sessions
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A pharmacy offers customers both a patented and a generic version of a certain drug. The pharmacy makes a profit of 20 percent of the cost on every box of the patented version, and it makes a profit of 5 percent of the cost on every box of the generic version. During a certain time period, which version of the drug yields a greater dollar profit to the pharmacy?
(1) The pharmacy pays more to the wholesaler per box for the patented version than for the generic version.
(2) The pharmacy sells 30 percent more of the generic version of the drug by weight than the patented version.
(1) The pharmacy pays more to the wholesaler per box for the patented version than for the generic version.
(2) The pharmacy sells 30 percent more of the generic version of the drug by weight than the patented version.
05 Oct 2020, 02:38
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Let's first break down the question stem and come up with the equations
Let the cost per box of the patented drug be Cp and of the generic version be Cg
Let the number of boxes of patented drug be Np and of generic version be Ng
We need to find which drug yield higher dollar value
Dollar profit on Patented drug = % profit per box * cost per box * no. of boxes
= 20% * Cp * Np
Dollar profit on Generic drug = % profit per box * cost per box * no. of boxes
= 5% * Cg * Ng
Statement 1:
Given that Cp > Cg
If we have Np> Ng then the patented box will result in higher dollar profit than generic
But if we have Np < Ng such that generic version may result in higher dollar profit
Hence Statement 1 alone is insufficient
Statement 2:
Let the weight of the drugs be Wp and Wg respectively
Given that Wg = (1+30%)*Wp
In other words Wg = 1.3Wp
Wg = Ng * weight per box of the generic version
Wp = Np * weight per box of the patented version
We don't know the weight per box to be able to establish a relationship between Ng and Np
hence Statement 2 is insufficient
Combining Statement 1 and 2
The problem still persists with the unknown weight per box to establish relationship between Ng and Np
Hence IMO it is E
Let the cost per box of the patented drug be Cp and of the generic version be Cg
Let the number of boxes of patented drug be Np and of generic version be Ng
We need to find which drug yield higher dollar value
Dollar profit on Patented drug = % profit per box * cost per box * no. of boxes
= 20% * Cp * Np
Dollar profit on Generic drug = % profit per box * cost per box * no. of boxes
= 5% * Cg * Ng
Statement 1:
Given that Cp > Cg
If we have Np> Ng then the patented box will result in higher dollar profit than generic
But if we have Np < Ng such that generic version may result in higher dollar profit
Hence Statement 1 alone is insufficient
Statement 2:
Let the weight of the drugs be Wp and Wg respectively
Given that Wg = (1+30%)*Wp
In other words Wg = 1.3Wp
Wg = Ng * weight per box of the generic version
Wp = Np * weight per box of the patented version
We don't know the weight per box to be able to establish a relationship between Ng and Np
hence Statement 2 is insufficient
Combining Statement 1 and 2
The problem still persists with the unknown weight per box to establish relationship between Ng and Np
Hence IMO it is E
03 Nov 2021, 06:48
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This question is a part of Are You Up For the Challenge: 700 Level Questions collection.
