Occupancy rate at a given time = No. of beds occupied / total number of beds.
We know that the occupancy rate has increased, from 87% to 92%.
three possibilities emerge -
1. The number of patients who are admitted has increased and hence the number of beds occupied also increases
2. The number of patients has remained the same, but the number of beds has reduced.
3. Patients spend more time being admitted. This leads to an increase in occupancy rates even though the other factors may not have changed.
Now, we are told that admission rates have decreased, from 95 per 1000 beds to 81 per 1000 beds.
Admission rates = No. of patients admitted / total number of beds.
We can rule out possibility 1 because if this quantity increases then the total number of beds has to increase much more (because the admission rates drop).
If the number of beds increases much more than the number of patients, then the occupancy rate will drop, not increase.
We can rule out possibility 2 because if the number of beds has reduced then the average number of patients admitted should decrease much more (because the admission rates drop).
If that is the case, then occupancy rates will not increase, as the numerator decreases by a higher proportion than the denominator
We are left with possibility 3. Which answer option states this? Option A.
B - Incorrect.
We are concerned with the entire population, not just with older people. Also, we are referring to periods, not one particular year.
C - Incorrect.
We cannot draw this conclusion from just two data points about two periods.
D - Incorrect.
We cannot conclude about individual nursing homes. Also, from the discussion above we cannot infer anything about the number of beds.
E - Incorrect.
We cannot conclude this based on just 2 data points.
_________________
- CrackVerbal Prep Team
For more info on GMAT and MBA, follow us on @AskCrackVerbal
Register for the Free GMAT Video Training Course :
https://www.crackverbal.com/GMAT/online