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The state removes all price restrictions on an essential medicine. Pharmaceutical companies start selling that medicine at a price nearly 5 times its earlier price. In such a situation, based on the authors reasoning above: 
A

The state should not control the price of the medicine, since competition in the market would eventually lead to an appropriate price being set.


B

The state should not control the price of the medicine, since the price increase is directly attributable to an increase in the price of the ingredients used in the medicine.


C

The state should not control the price of the medicine, but it should supply the ingredients for the medicine at lower prices.


D

The state should control the price of the medicine, since people may not be able to afford it anymore.

Approved answer
Correct option is A)

The correct answer is (a) – the state should not control the price of the medicine, since competition in the market would eventually lead to an appropriate price being set. The author provides this reasoning for why the state should not control the prices of medicines, in the last paragraph of the passage. There is no information in the facts provided to indicate that (b) is the correct option. The author does not discuss the state providing the ingredients for medicines at all, and so, option (c) cannot be correct. Option (d) is also not correct, since we do not know what the previous price of the medicine was, nor do we have any information about whether people can afford it or not; this option is also contradictory to the author’s argument that the market would eventually ensure that no company makes extraordinary profits.

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by (72.3k points)
 
Best answer

The state removes all price restrictions on an essential medicine. Pharmaceutical companies start selling that medicine at a price nearly 5 times its earlier price. In such a situation, based on the authors reasoning above: 
A

The state should not control the price of the medicine, since competition in the market would eventually lead to an appropriate price being set.


B

The state should not control the price of the medicine, since the price increase is directly attributable to an increase in the price of the ingredients used in the medicine.


C

The state should not control the price of the medicine, but it should supply the ingredients for the medicine at lower prices.


D

The state should control the price of the medicine, since people may not be able to afford it anymore.

Approved answer
Correct option is A)

The correct answer is (a) – the state should not control the price of the medicine, since competition in the market would eventually lead to an appropriate price being set. The author provides this reasoning for why the state should not control the prices of medicines, in the last paragraph of the passage. There is no information in the facts provided to indicate that (b) is the correct option. The author does not discuss the state providing the ingredients for medicines at all, and so, option (c) cannot be correct. Option (d) is also not correct, since we do not know what the previous price of the medicine was, nor do we have any information about whether people can afford it or not; this option is also contradictory to the author’s argument that the market would eventually ensure that no company makes extraordinary profits.

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