It is not uncommon to find that prescription drugs sell for more in Canada than they do in other countries.How could drug companies' price strategy affect our social welfare
A)Drug companies are engaging in price discrimination, and this practice certainly reduces global social welfare.
B)Global social welfare could be improved if the price in Canada were reduced to the price charged in other countries.
C)Global social welfare could be improved if the price in the other countries were increased to the price charged in Canada.
D)Drug companies are engaging in price discrimination, but this might improve global social welfare if it gives more people access to the drugs.

Question

Quizplus · Accepted Answer

Price discrimination can improve global social welfare if it allows drug companies to cover costs and provide access to more people who might not afford the drugs otherwise.

It Is Not Uncommon to Find That Prescription Drugs Sell