In a recent study, researchers collected

Answer choices

1. A

   Helps Explain Difference3% picked this

   A price war wherein pharmaceutical drug wholesalers tried to undercut each others’ prices began shortly before

   The guidebook is published once a year. Let's pretend it comes out Jan. If we're in May, and a price war breaks out between wholesalers, they each keep lowering their prices trying to undercut the other. By the time the researcher calls them in August, they've slashed their prices to where the prices are now 60-80% less than what they were back in Jan, when the guidebook published its annual price listings.

   3%
2. B

   Correct69% picked this

   Suggested wholesale prices for the most common pharmaceutical drugs tend to be less than those for

   Why this is right

   The drug prices being compared are for the same top 300 most common drugs. So talking about less common drugs means we're talking about drugs that aren't on the lists of drug prices we're trying to explain.

   Skill tested: Paradox · how this choice captures the argument's function is the move to repeat next time.

   69%
3. C

   Helps Explain Difference11% picked this

   Wholesale prices for pharmaceutical drugs often fluctuate dramatically from one month

   This is similar to (A). It's playing off the fact that the guidebook only gets published once a year, so if prices were to dip 60-80% during the year, then you might get that big a mismatch between the current prices that wholesalers are offering and the prices that got recorded in the book back in January. This answer makes sure to provide strong wording (fluctuate dramatically), so that it has enough impact to potentially explain a 60-80% difference.

   11%
4. D

   Helps Explain Difference12% picked this

   Wholesale prices suggested by the independently published pharmaceutical price guidebook are calculated to allow every pharmaceutical wholesaler

   This answer is a little lame to me, but it's giving us a way to think that the prices in the guidebook are substantially higher than they should be (to allow room for substantial profits), so that explains why the price cited by the wholesalers themselves could be much lower than the price in the guidebook. I'm a little frustrated that the story of this answer involves us thinking that when researchers called and asked for current prices of the top 300 drugs, the wholesalers quoted a price that isn't going to allow them to make substantial profits? That seems to involve a weird, counterintuitive assumption. But ... there's no way we can pick (B), since it's irrelevant, so this still opens a doorway through which we would try to explain the price disparity: in the guidebook, the prices are calculated to allow for big profits (the prices are set much higher)

   12%
5. E

   Helps Explain Difference6% picked this

   The prices suggested by the independently published pharmaceutical price guidebook are for sales of relatively small quantities of

   This plays off the fact that the prices that researchers were quoted over the phone were from wholesalers specializing in bulk sales (it's common sense that buying in bigger quantity allows you to buy at a lower price). Since the prices in the guidebook are for small orders, they don't have that "bulk discount" built in, and so that's why they look much higher than the prices quoted from bulk-sale wholesalers.

   6%