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Occasionally, pharmaceutical companies mark down the price of a new drug sold to pharmacies during a trial phase, when the drug is being marketed to buyers. Such trials often cause pharmacies to buy a huge amount of the drug. Nonetheless, the pharmaceutical companies could often profit more by not giving trials.
Which of the following, if true, most strongly supports the claim above about the pharmaceutical companies’ profits?
A. Generally, the quantity of markdown given by pharmaceutical companies to pharmacies is prudently calculated to be the least needed to attract buyers to the drug.
B. For many drugs, the trial phase during which prices are lowered is about a month, which is not long enough for buyers to get used to the low price.
C. The rationale of such trials is to keep the new drugs at the top of buyers’ minds and appeal to buyers now using competing drugs.
D. Pharmacies often amass in their storage rooms drugs bought at markdown during trials and then sell these drugs later at regular prices.
E. If some pharmaceutical companies offer trials but other competing pharmaceutical companies do not, the companies that offer trials will lure buyers away from the other companies.
_________________
Which of the following, if true, most strongly supports the claim above about the pharmaceutical companies’ profits?
A. Generally, the quantity of markdown given by pharmaceutical companies to pharmacies is prudently calculated to be the least needed to attract buyers to the drug.
B. For many drugs, the trial phase during which prices are lowered is about a month, which is not long enough for buyers to get used to the low price.
C. The rationale of such trials is to keep the new drugs at the top of buyers’ minds and appeal to buyers now using competing drugs.
D. Pharmacies often amass in their storage rooms drugs bought at markdown during trials and then sell these drugs later at regular prices.
E. If some pharmaceutical companies offer trials but other competing pharmaceutical companies do not, the companies that offer trials will lure buyers away from the other companies.
_________________
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(D) for me.
So, the conclusion says that the pharma companies can make profits by not giving discounted drugs to the pharmacies.
How could they do that?
If the discounted drugs given to pharmacies sell at higher prices sometime later then the profits gained by the pharmacies are pharmaceutical companies' loss. So, if they want the profits to be thier then they better not sell the drugs at cheaper prices to the pharmacies in the first place. Option (D) shines a light on that explicitly, if the pharmacies are hoarding up the supplies of cheap drugs by the pharma companies and earning profits from them later, then the pharma companies can avoid selling them the cheaper drugs and sell the drugs at the higher price later when the price rises themselves and make "more money".
_________________
So, the conclusion says that the pharma companies can make profits by not giving discounted drugs to the pharmacies.
How could they do that?
If the discounted drugs given to pharmacies sell at higher prices sometime later then the profits gained by the pharmacies are pharmaceutical companies' loss. So, if they want the profits to be thier then they better not sell the drugs at cheaper prices to the pharmacies in the first place. Option (D) shines a light on that explicitly, if the pharmacies are hoarding up the supplies of cheap drugs by the pharma companies and earning profits from them later, then the pharma companies can avoid selling them the cheaper drugs and sell the drugs at the higher price later when the price rises themselves and make "more money".
_________________
Claim - P.Companies can get more profit by not giving products to pharmacies at lower price.
We need to strengthen the claim. Only D strengthens the claim.
We need to strengthen the claim. Only D strengthens the claim.
when drug is being marketed to buyers, pharmaceutical companies mark down the price of new drug sold to pharmacies during trial phase.
during these trials, pharmacies often buy huge amount of the drug.
conclusion- pharmaceutical companies could profit more by not giving trials.
A. Generally, the quantity of markdown given by pharmaceutical companies to pharmacies is prudently calculated to be the least needed to attract buyers to the drug.
if quantity of markdown is less then not giving trials and making profits out of it doesnt make sense. because with the current one they are selling less at lower price so the assumption on which the conclusion was based doesnt get attacked, so reject.
B. For many drugs, the trial phase during which prices are lowered is about a month, which is not long enough for buyers to get used to the low price.
this talks about length of trial and that buyers not getting used to low price. both are not relevant here. reject.
C. The rationale of such trials is to keep the new drugs at the top of buyers’ minds and appeal to buyers now using competing drugs.
not concerned about whats actuall rationale from pharmaceutical companies side. reject.
D. Pharmacies often amass in their storage rooms drugs bought at markdown during trials and then sell these drugs later at regular prices.
perfect. this is the hidden link. if during the trial phase if companies can buy in large quantites and then sell later at lower price then definitely the pharma companies are loosing out on making profit from it. so the above mentioned plan definitely avoid this effect if plan implemented properly. keep.
E. If some pharmaceutical companies offer trials but other competing pharmaceutical companies do not, the companies that offer trials will lure buyers away from the other companies.
no effect at all. reject.
during these trials, pharmacies often buy huge amount of the drug.
conclusion- pharmaceutical companies could profit more by not giving trials.
A. Generally, the quantity of markdown given by pharmaceutical companies to pharmacies is prudently calculated to be the least needed to attract buyers to the drug.
if quantity of markdown is less then not giving trials and making profits out of it doesnt make sense. because with the current one they are selling less at lower price so the assumption on which the conclusion was based doesnt get attacked, so reject.
B. For many drugs, the trial phase during which prices are lowered is about a month, which is not long enough for buyers to get used to the low price.
this talks about length of trial and that buyers not getting used to low price. both are not relevant here. reject.
C. The rationale of such trials is to keep the new drugs at the top of buyers’ minds and appeal to buyers now using competing drugs.
not concerned about whats actuall rationale from pharmaceutical companies side. reject.
D. Pharmacies often amass in their storage rooms drugs bought at markdown during trials and then sell these drugs later at regular prices.
perfect. this is the hidden link. if during the trial phase if companies can buy in large quantites and then sell later at lower price then definitely the pharma companies are loosing out on making profit from it. so the above mentioned plan definitely avoid this effect if plan implemented properly. keep.
E. If some pharmaceutical companies offer trials but other competing pharmaceutical companies do not, the companies that offer trials will lure buyers away from the other companies.
no effect at all. reject.
Bunuel
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