We live in an age when medicines developed by the pharmaceutical industry provid

Question

We live in an age when medicines developed by the pharmaceutical industry provide protection against chronic and acute conditions that simply killed our forebears. The availability of these medicines is affected by at least two important aspects of public economic policy: public support for research and the granting of patents. Do you believe that the government should spend tax revenues to support research within universities that is later put to commercial applications? Do you believe that pharmaceutical companies should be allowed to patent their new drugs? Justify your answers by drawing on economic concepts from your readings.

PLEASE THIS IS A ECONOMICS QUESTION PLEASE APPLY ECONOMICS CONCEPTS TO THE QUESTION THX :)

Explanation / Answer

yes govt should provide fund to universities because practically it is not possible for govt to produce such drugs by iyself.Because marginal cost of producing these is greater than marginal benefit if these drugs are produced by govt.So in that case what govt can do is ,they can provide economic aid to the universities and inturn they make an agreement to provide such goods at subsidies rate to common people.So here ,

marginal benefit > marginal cost i.e marginal social benefit to the society is greater when private party produces goods and provide it to common at lower rates.Because economically there is less efficiency losses when the research is done by university.So dead wright loss is reduced in this case.

No patent should not be allowed because in that case the condition of monopoly arises and commercial people will charge more and if patent is not allowed then market will behave like pure competition and there is only nominal profit available for supplier and consumer will not suffer

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