gmat1011 wrote:
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.
+1.
This is a relatively easy question, mainly due to the other answer choices sort of "suck" for lack of a better word.
We are desperately searching for why? Why is per capita spending still increasing? Whyyyyy?
A. New product doesn't mean price increase. An increase inherently means something exists, then increases. A new product can be set at any price. So, hypothetically, we could have the same number of people, now purchasing new and more expensive products. Hence, per capita spending is still increasing. These basta*** are getting rid of the old products and then creating replacements that are more expensive. Ding Ding Ding - sounds pretty logical, boys and girls...but let's move on.
B. B states population rose, but the stimulus mentions that usage didn't increase. So, who cares and I am still confused.
C. Whoop de doo for these businesses. We are trying to find out why per capita expenditure on these drugs are increasing, even though the usage isn't increasing, nor is the price of the
current drugs. But, I will entertain this bull****. Let's assume the costs of the businesses went down from these new manufacturing processes. Terrific. So, these businesses' profits increase! Yay, P = R - C. Yay MBA stuff. So, presumably, we have lower costs, higher profits, but same price. So, uhhhh, why did the spending per capita increase? And why do I care about businesses' profits? I don't. C = irrelevant - leave me alone.
D. This furthers the confusion. So, usage doesn't go up - per the stimulus. And apparently, drugs are now cheaper. However, per capita spending is still increasing. WHAT IS THIS MADNESS?!?!
E. Well isn't this terrific. This answer choice causes me to waste 10 seconds of my test-taking life. Stimulus states: usage doesn't increase. Stimulus also states prices of
current drugs do not increase. This answer choice is weak on several levels. What if these foreign manufacturers of drugs NEVER actually sold any of their drugs? Meaning, if they stopped marketing, who gives a sh**? Their products were never purchased in the first place, in other words, their products never had ANY affect on per capita spending! Laugh at this answer choice, roll your eyes, select A and mock the GMAT gods for trying to fool you.
Not. This. Time.
This is a great example of active vs. passive reading. Whenever you read a stimulus, try and attack its holes - rather than read, and hope an answer choice will make sense. I rarely read the question stem prior to the stimulus, yet again, I was an LSATter. It is a waste of time to read something twice

. I feel if you attack CR with an active mind, you will perform beautifully. And, have fun with it!
HTH