As of 2015, the pharmaceutical companies Abbott Laboratories, AstraZeneca, Avent
ID: 1110926 • Letter: A
Question
As of 2015, the pharmaceutical companies Abbott Laboratories, AstraZeneca, Aventis Pharmaceuticals, Bristol-Myers Squibb Company, Eli Lilly, GlaxoSmithKline, Janssen, Johnson & Johnson, Merck, Novartis, and Pfizer provide low-income, elderly people with a card guaranteeing them discounts on many prescription medicines. Why would these firms do that? O A. By charging low-income seniors a lower price they can afford while continuing to charge the rest of the market the higher price, the pharmaceutical companies increase their profits. in the market. By offering a discount to low-income seniors, the firms are able to avoid government regulation. However, the price is still high enough that most seniors will B. By charging low-income seniors a discounted price, the pharmaceutical companies hope to avoid being forced by the government to lower prices for everyone c. not purchase the drugs; thus, the pharmaceutical companies will lose very little profit. D. The government imposed new regulations requiring pharmaceutical companies to institute programs to help low-income seniors. By working together the firms were able to lower their costs.Explanation / Answer
A..)) by charging low income seniors a lower price they can afford while continuing to charge the rest of the market a higher price,the pharmaceutical companies increases their profits.
As the above mentioned companies are monopolistic competitive firms,they want to increase their market share by providing discount on prescription medicine to elders irrespective of government intervention so that they could incure higher profits.by providing discounts, elders would be interested to purchase medicine of that particular firm which would produce good will and increase sales .
Although government is framing a policy like Obama care,like Rx card,orange card Medicare card provides hefty discount in order to lure customer and make customer to confuse how it works and in that case it increases market share and sales.and henceforth increases profits too.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.