Mc Graw Hill T-3 CR1

Which of the following, if true, provides the strongest evidence that the company should not follow the consultant’s advice?

the question is which is the point for which we should not follow the consultants's advise

E states that "Shipping the cough syrup bottles without the measuring cups will provide a marginal improvement in the number of cough syrup bottles that can be shipped in a standard package".

which means we will follow the consultants advise. hence E is incorrect.

Now correct answer is A.

if we sell syrup without cup then consumers consume either less dose or overdose.

less dose:- Not effective lost their faith in that company and next time they wont buy
overdose:- Dangerous hence again consumer lost their faith and never purchase this syrup

when measuring cap is provided then consumers cannt complain for overdose or less syrup and more effective will be the medicine hence sells will increase.


So i am 100 % sure answer is A

neha.patni wrote:A brand of cough syrup comes with a measuring cup attached so that customers can measure the proper dosage. A consultant has pointed out that this cup is unnecessary, since most customers have measuring cups at home. Since the cups increase the cost of packaging the cough syrup and reduce the total number of units that can be shipped in a standard package, the consultant advises that the company can increase its net revenue on this product (total revenue minus total costs) by selling the cough syrup without the measuring cups.

Which of the following, if true, provides the strongest evidence that the company should not follow the consultant’s advice?

A. Studies have shown that customers who use cough syrup without a measuring cup frequently take either too little or too much of the medicine, rendering the dosage either ineffective or, in cases of overdose, dangerous.
E. Shipping the cough syrup bottles without the measuring cups will provide a marginal improvement in the number of
cough syrup bottles that can be shipped in a standard package.

Key thing is argument says: Cups increase packaging cost & reduce quantiy of bottle shipped; Net revenue = total revenue - total cost.

Consultant assumes that without cup - either packaging cost will reduce or quantity of bottle being shipped will increase or both can happen. In any of these case, one of the three things can happen: total cost will reduce (when bottle without cup..reduces packaging cost) or total revenue will increase (nos of bottle shipped increase), or both can happen. In E - total revenue is not going to increase as nos of bottle remained that the same level...but it does not mean total cost will not reduce. Without cup..total cost will surely reduce, therefore net revenue will increase. E Strengthens

In A - customer may presume that syrup is ineffective....that can reduce the sale leading to lower total revenue. Nos of bottle being sold decrease, means total revenue decreases. Also total cost will also drop, but certainly it will not compensate for loss in revenue from dropped sales. Therefore net revenue will drop. IMO A