Last visit was: 24 Apr 2026, 10:35 It is currently 24 Apr 2026, 10:35
Home
Messages
Tests
Schools
Events
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.
Go to My Error Log Learn more
Close
Request Expert Reply
Confirm Cancel
Back to Forum
Create Topic
Sub 505 (Easy)|   Strengthen|      
avatar
deepika1612
avatar
Joined: 11 Jul 2013
Last visit: 02 Apr 2014
Posts: 3
Own Kudos:
7
 [2]
Posts: 3
Kudos: 7
 [2]
Alexander Verna, CEO of Drugnorm is evaluating the option of manufactu 19 Sep 2013, 19:29
Kudos
Add Kudos
2
Bookmarks
Bookmark this Post
00:00
Start Timer
Pause Timer
Resume Timer
Show Answer
Hide
Show
History
E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!

Difficulty:

5% (low)

Question Stats:

92% (01:28) correct 8% (01:51) wrong based on 209 sessions

History

Date
Time
Result
Not Attempted Yet
Alexander Verna, CEO of Drugnorm is evaluating the option of manufacturing generic version of a bestselling and soon to go off the patent drug. Mark, the marketing head, has determined that the company could charge a maximum price of $5 for the standard dose of the product. Alexander does not wish to produce any product that will not generate at least a 25 percent gross profit margin.

The answer to which of the following questions would be most relevant to the CEO in determining whether or not to produce a generic form of this drug?

A. If the company does produce the drug, what color should its container be?
B. How much did the rival company charge for a standard dose of the drug when it first came on the market?
C. Does the company's sales force currently understand the pharmaceutical properties of this particular drug?
D. By how much did the company's total revenue increase or decrease over the last five years?
E. What will be the average cost per standard dose to manufacture and sell this product?
ShowHide Answer
Official Answer
E
avatar
rahulsehgal
avatar
Joined: 28 Feb 2011
Last visit: 16 Jan 2023
Posts: 58
Own Kudos:
61
Given Kudos: 1,421
Location: India
Concentration: Strategy, Marketing
Schools: IIM ISB'22 IIMA IIMC
GPA: 3.77
WE:Analyst (Computer Software)
Schools: IIM ISB'22 IIMA IIMC
Posts: 58
Kudos: 61
Alexander Verna, CEO of Drugnorm is evaluating the option of manufactu 19 Sep 2013, 19:53
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Do you mean to say the source did not specify the answer for this question ?

As far as my understanding, I choose E.

As I was going through the choices, the answer could be either C or E and finally selected E.
avatar
deepika1612
avatar
Joined: 11 Jul 2013
Last visit: 02 Apr 2014
Posts: 3
Own Kudos:
7
Posts: 3
Kudos: 7
Alexander Verna, CEO of Drugnorm is evaluating the option of manufactu 19 Sep 2013, 19:56
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Yea that's right! The source did not specify the answer.
Can you explain to me why it is E?
avatar
rahulsehgal
avatar
Joined: 28 Feb 2011
Last visit: 16 Jan 2023
Posts: 58
Own Kudos:
61
Given Kudos: 1,421
Location: India
Concentration: Strategy, Marketing
Schools: IIM ISB'22 IIMA IIMC
GPA: 3.77
WE:Analyst (Computer Software)
Schools: IIM ISB'22 IIMA IIMC
Posts: 58
Kudos: 61
Alexander Verna, CEO of Drugnorm is evaluating the option of manufactu 19 Sep 2013, 20:18
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Actually, this is how I approached it ( other forum members, please correct me if I am going wrong somewhere)

A) seemed irrelevant. We are NO where talking about the color. Our main motto is to bring in an increase in revenue of Drugnorm's company.

B) I did not choose this one because as far as my understanding from the question, the plan is to bring an increase in revenue of Drugnorm's company without doing any comparisons with our company. Also, the statement mentioned 'patent', so, it should be specific to this company only and that's why I did think that doing comparisons with other company will hold any good here. Thus, did not choose B.

C) I do understand that there is a discussion about the Marketing head, suggesting a maximum price for the drug. But, I still did not choose this choice because I found it too extreme and not very much limited to the context we are talking about. If we are talking about profit, we would surely see what's the costs that have been incurred in preparing the product and then similarly will put a cap on what's the selling price should be to attain a specific profit margin. I did not see that happening here.

d) My understanding of the question stem says that we are trying to increase the gross margin for a particular product and thus did not go for this choice as it talks about the company's performance from the last 5 years; again quite too extreme for me to consider.

and thus finally selected E. It talks about the average cost the company will be bearing to produce the product and the same can be helpful in arriving at the profit margin cap.

Hope this helps in some way.

Please do correct me I did not get this question correctly. Thanks in advance !!
avatar
deepika1612
avatar
Joined: 11 Jul 2013
Last visit: 02 Apr 2014
Posts: 3
Own Kudos:
7
Posts: 3
Kudos: 7
Alexander Verna, CEO of Drugnorm is evaluating the option of manufactu 19 Sep 2013, 20:33
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Oh god! thanks Rahul. This actually makes alot of sense now!!
User avatar
mohnish104
User avatar
Joined: 03 Dec 2012
Last visit: 19 Apr 2014
Posts: 142
Own Kudos:
976
Given Kudos: 291
Posts: 142
Kudos: 976
Alexander Verna, CEO of Drugnorm is evaluating the option of manufactu 12 Oct 2013, 05:13
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Its a straight E. Working in pharmaceutical sales has finally paid off :p
User avatar
VerbalBot
User avatar
Non-Human User
Joined: 01 Oct 2013
Last visit: 04 Jan 2021
Posts: 19,425
Own Kudos:
1,010
Posts: 19,425
Kudos: 1,010
Alexander Verna, CEO of Drugnorm is evaluating the option of manufactu 04 Jan 2026, 02:13
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Automated notice from GMAT Club VerbalBot:

A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.

This post was generated automatically.
Moderators:
GMATNinja
GMAT Club Verbal Expert
7391 posts
AbhishekP220108
504 posts
bhanu29
358 posts