Chapter 1: Five Foundations of Economics E Page 11 12. What are five foundations

Question

Chapter 1: Five Foundations of Economics E Page 11 12. What are five foundations of economics? Pharmaceutical companies are perceived as profiting unfairly from drugs they sell. A new law shortens the time during which the manufacturer has exclusive use of the drug formula. Place the events in sequence to illustrate how restricting profits by pharmaceutical companies affects innovation. Start by clicking the first item in the sequence or dragging it here Drag the items below into the box above in the correct order, starting with the first item in the sequence. Pharmaceutical companies reduce their estimate of the profitability of new drug research Fewer new drugs are brought to market. Pharmaceutical companies are less willing to invest in drug development.

Explanation / Answer

Since the firms will be having the exclusive rights to manufacture and sell the drug for a limited time period thus the firms overall profitability will decline due to this the firms are less likely to invest in R&D activity in future thus they will reduce their profit estimate and lastly fewer new drug will be introduced. thus the sequence will be,

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.