EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
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Question
Chapter 12, Problem 6Q
To determine
The reason for the producer not opting to charge a high price for life-saving drugs.
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When the FDA lifted restrictions of TV advertisements for prescription medication in 1997, How has the regulatory affected the market for pharmacuticals?
Why is pricing one of the most critical and complex decisions a pharmacy manager has to make?
what are pricing tactics and examples? What are some forms of price discriminations?
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- Based on the demand curve you showed in question 2 above, what is the minimum and maximum price you can charge for your product? This does not mean that you will, in fact, charge the minimum or maximum price. It simply gives you an idea of the range of prices your demand curve allows you to charge. What are the quantities corresponding to the minimum and maximum price? Please show your work and explain how you calculated these prices and quantities. The demand curve I showed in question 2: P-16-4Qarrow_forwardWhy would a healthcare manager ever want to price discriminate?arrow_forwardThe New York Times has stated that Mylan, the company that makes the now infamous Epipen, has become “the poster boy for out of control drug prices.” Why did this Pittsburgh-based company raise prices so much that Americans pay three times as much as Canadians for the same drug? Do you think patents are good for society?arrow_forward
- U.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reasons, oppose laws allowing reimportation of their drugs back into the United States.arrow_forwardHow does monopoly effect the pharmaceutical industry?arrow_forwardHow does price discrimination help customers?arrow_forward
- U.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reasons, oppose laws allowing re-importation of drugs to the United States.arrow_forwardSuppose there exists a costless way to charge drivers on the freeway. Under this costless system, tolls on the freeway would be adjusted according to traffic conditions. For example, when traffic is usually heavy, as it is from 6:30 a.m. to 9:00 a.m. on a weekday, the toll to drive on the freeway would be higher than when traffic is light. In other words, freeway tolls would be used to equate the demand for freeway space with its supply. Would you be in favor of such a system to replace our current (largely zero price) system? Explain your answer.arrow_forwardSuppose an investigation reveals that the prices charged for drinks at a tourist resort are significantly higher than the prices charged for the same drinks at hotels in the nearby village. What might the explanation for this situation be?arrow_forward
- How much is total surplus if the market is perfectly competitive?How much is total surplus if the market is controlled by a single price monopolist?Suppose the single price monopolist started charging all customers the maximum price they are willing to pay. How much additional surplus is created?arrow_forward#5arrow_forwardare monopolies good or bad for consumers?arrow_forward
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