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A CR question

by stormier » Wed Dec 08, 2010 8:34 am
The new drug Prozac and the old one Elavil are about equally effective in treating various forms of depression, although patients on the newer drug may have slightly fewer side effects. Thus, revenue from the sale of the new drug is going to far exceed the revenue from the sale of the old drug.

All of the following statements weaken the conclusion of the argument above, EXCEPT:

(A) Elavil is also used as a powerful anti-emetic medicine.

(B) The Drug Control Authorities in six states have refused to allow the sale of Prozac till some more tests are carried out.

(3) Some side effects of Elavil are common to Prozac as well.

(D) Prozac is not recommended as an anti-depressant for diabetics and heart patients.

(E) The unit sale price of Elavil is higher than that of Prozac.

Your Answer : E
Actual Answer : C

Explanation
The logic in the given argument is pretty weak : just because drug A is as effective as drug B for a particular cure, and has fewer side effects, does not mean that revenue from drug A is going to be more.
The old drug might still sell more if it has an alternate use (option A), or if sale of the new drug is not allowed in certain regions (option B), or if the new drug`s usage is restricted (option D), or if the sale price of drug B is higher (option E).
All these can be possible reasons for revenues from sale of drug B to be as high, or higher, from those of drug A.

Option C, however, offers no such reason, and is the right answer.

Now is that correct explanation as provided ? I still think E is the right answer, because Prozac would sell more if Elavil's sale price is higher and thus it does not weaken the conclusion. Any comments.
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by rkanthilal » Wed Dec 08, 2010 9:53 am
stormier wrote:
Explanation
The logic in the given argument is pretty weak : just because drug A is as effective as drug B for a particular cure, and has fewer side effects, does not mean that revenue from drug A is going to be more.
The old drug might still sell more if it has an alternate use (option A), or if sale of the new drug is not allowed in certain regions (option B), or if the new drug`s usage is restricted (option D), or if the sale price of drug B is higher (option E).
All these can be possible reasons for revenues from sale of drug B to be as high, or higher, from those of drug A.

Option C, however, offers no such reason, and is the right answer.

Now is that correct explanation as provided ? I still think E is the right answer, because Prozac would sell more if Elavil's sale price is higher and thus it does not weaken the conclusion. Any comments.
Yes, I agree with the OE.

The conclusion is that revenue from the sale of the new drug (Prozac) is going to far exceed the revenue from the sale of the old drug (Elavil). This is based on the fact that both drugs are equally effective and Prozac has fewer side effects. This is a very strongly worded conclusion that is based on very few facts.

We need to choose the one answer that does not weaken the conclusion. The formula for revenue is:

REVENUE = (SALES PRICE) X (TOTAL UNITS SOLD)

Any answer choice that implies higher unit sales or a higher price for the drug Elavil will weaken the conclusion.

Answers (A), (B), and (D) imply higher unit sales while answer (E) specifically states that Elavil has a higher price. These answers weaken the conclusion by creating uncertainty. We can no longer say that one drug will have a higher revenue because we don't know the magnitude of these factors.

For example, answer (B) states that the authorities in six states have refused to allow the sale of Prozac. This will obviously hurt sales but will it decrease sales enough to result in Prozac generating lower revenue than Elavil. We don't know. We can't determine which drug will have the higher revenue. Since the conclusion is so strongly worded, introducing any amount of uncertainty weakens it.

Answer (E) states that "the unit sale price of Elavil is higher than that of Prozac." I believe your reasoning is that since a higher price results in lower sales, Prozac will sell more and thus generate more revenue.

In my opinion, this is incorrect for two reasons.

1) Even if a higher price results in lower unit sales, we don't know how the equation will play out. Similar to the other wrong answers, this answer creates uncertainty. A higher price may result in lower revenue or higher revenue. There is no way for us to know based on the information provided.

2) We can't assume that a higher price will lead to fewer sales. This is usually the case but there is nothing in the passage to suggest that this will happen. What if insurance covers the cost of the drug? Or, what if the higher price is only a few percentage points higher? In these cases the amount of sales may not be affected.
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by kapur.arnav » Wed Dec 08, 2010 10:05 am
stormier wrote:The new drug Prozac and the old one Elavil are about equally effective in treating various forms of depression, although patients on the newer drug may have slightly fewer side effects. Thus, revenue from the sale of the new drug is going to far exceed the revenue from the sale of the old drug.

All of the following statements weaken the conclusion of the argument above, EXCEPT:

(A) Elavil is also used as a powerful anti-emetic medicine.

(B) The Drug Control Authorities in six states have refused to allow the sale of Prozac till some more tests are carried out.

(3) Some side effects of Elavil are common to Prozac as well.

(D) Prozac is not recommended as an anti-depressant for diabetics and heart patients.

(E) The unit sale price of Elavil is higher than that of Prozac.

Your Answer : E
Actual Answer : C

Explanation
The logic in the given argument is pretty weak : just because drug A is as effective as drug B for a particular cure, and has fewer side effects, does not mean that revenue from drug A is going to be more.
The old drug might still sell more if it has an alternate use (option A), or if sale of the new drug is not allowed in certain regions (option B), or if the new drug`s usage is restricted (option D), or if the sale price of drug B is higher (option E).
All these can be possible reasons for revenues from sale of drug B to be as high, or higher, from those of drug A.

Option C, however, offers no such reason, and is the right answer.

Now is that correct explanation as provided ? I still think E is the right answer, because Prozac would sell more if Elavil's sale price is higher and thus it does not weaken the conclusion. Any comments.
Maybe the price/tablet of Elavil is 100$ and Prozac 10$ and if 10 of Elavil and 90 of Prozac are sold .... Then Revenue from Prozac would be less than the revenue generated from Elavil... Hence C is better...
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by stormier » Wed Dec 08, 2010 10:36 am
Thanks guys, I guess I didn't realize the subtlety of sales (number) vs revenues. Aarg! Read the argument carefully is the lesson.
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