Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 3SQP
To determine
Explain the reason for higher price for drugs in hospital and lower price in other drug stores.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Why would a healthcare manager ever want to price discriminate?
Suppose the inverse demand curve for drugs is p(q) = 200 - 4q and the inverse supply curve is p(q) = q. Draw the supply
and demand curves on the graph below. Label the current price and quantity, label and calculate the current producer
and consumer surplus, and calculate and label the total revenue accumulating to suppliers in this market.
Should price controls be imposed on life-saving drugs? Will consumers benefit or be harmed by this type of regulation?
Chapter 9 Solutions
Micro Economics For Today
Ch. 9.1 - Prob. 1GECh. 9.1 - Prob. 2GECh. 9.2 - Prob. 1YTECh. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQP
Ch. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQPCh. 9 - Prob. 10SQPCh. 9 - Prob. 11SQPCh. 9 - Prob. 12SQPCh. 9 - Prob. 13SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
Knowledge Booster
Similar questions
- What are the potential benefits of reducing the availability of illegal drugs versus reducing the demand for such substances?arrow_forwardIn the United States, most hospitals are non-profit, while nearly all pharmaceutical companies are for profit. Can you offer an explanation based on the consumer shopping problem?arrow_forwardEvaluate the impact competitors and additional economic factors have on the results of the generic drug pricing strategies. What factors contribute to the advantages and disadvantages of various pricing strategies?arrow_forward
- 13 2013200 P0004 Suppose that a new drug (A) has been approved to treat a life-threatening disease. The demand for that drug is shown on the accompanying graph by demand curve A Prior to approval of this drug, the only treatment for this condition was any one of several nonprescription, or over the counter, pain relievers. The demand for one brand of the several nonprescription pain relievers is also shown on the graph as demand curve B. Price 75 70 65 % 100 200 300 400 500 Quarsity At a price of $15 (the price at which the two demand curves intersect), the price elasticity of demand for the new drug is for the over-the-counter pain rellever the price elasticity of demandarrow_forwardUse a graph to illustrate how the following changes would affect the demand curve for inpatient services at a hospital in a large city. a. Average real income in the community increases. b. A number of physicians in the area join together and open up a discount-price walk-in clinic; the cross-price elasticity of demand between physician services and inpatient hospital services is –0.50.arrow_forwardIdentify the initial equilibrium price and quantity of the drug per day. Suppose the government imposes a price control at $1.50 a dose. How many doses are purchased after the price control is imposed?arrow_forward
- Should there be one $/QALY for an entire country? How would you expect drug companies to react to price limits set by public programs?arrow_forwardHaving provided some evidence (two points of comparison), you needs to explain why this evidence shows that demand for libraries hsa fallen.arrow_forwardWhy does taking a drug off a formulary increase the prices to the consumer?arrow_forward
- 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_forwardWhen generic versions enter the market after the patent on a branded drug has expired The branded drug increases market share and price The branded drug increases market share and decreases price The branded drug decreases market share and increases price The branded drug decreases market share and decreases pricearrow_forwardProblem 2 Elixir Springs is a natural monopoly that bottles Elixir, a unique health product with no substitutes. The total fixed cost incurred by Elixir Springs is $150,000, and its marginal cost is 10 cents a bottle. The figure illustrates the demand for Elixir. a) What is the price of a bottle of Elixir and how many bottles does Elixir Springs sell? b) Does Elixir Springs maximize total surplus or producer surplus? Figure 1 Elixir Springs 50 40 30 20 ATC 10 MC MR 0.5 1.0 1.5 2.0 2.5 Quantity (millions of bottles/year) Price (cents per bottle)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning