Drug Companies Keep Lid on Price Increases
Each week, you must answer questions provided by the Professor on articles from The Wall Street Journal or The New York Times.You are expected to participate in these discussions each week.
Wall Street Journal Feb. 27, 2017 pg 1 https://www.wsj.com/articles/facing-criticism-drug…
“Drug Companies Keep Lid on Price Increases,”
1.Are the pricing decisions by drug companies defined by supply and demand or are they more like the actions of a monopoloist?
2.What gives these companies this power? Please also tell me the positive benefits that derive from this power.
Answer Preview
Pricing decisions by companies are more like actions of a monopolist than that of supply and demand. The pricing does not seem to affect the demand a lot. Drugs are purchased regardless of the pricing. The pricing, however, gives the company a brand name when they have no major competition they are able to do better in the market…
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