In some countries,a binding price ceiling is placed on prescription medicines.What would you expect the prescription medicine market to be like in these countries?
A) The legal maximum price would mean that all consumers are able to receive the medicines they need at a price they can afford.
B) The legal maximum price would mean that pharmaceutical companies face an incentive to sell more prescription medicines in that country.
C) The legal maximum price would mean that it is unlikely that an illegal and dangerous black market for prescription drugs will form in that country.
D) The legal maximum price would mean that pharmaceutical companies face an incentive to develop new prescription medicines.
E) The legal maximum price would mean that not all consumers will have access to prescription medicines.

Question

Quizplus · Accepted Answer

Placing a binding price ceiling on prescription medicines would mean that the price cannot go above a certain level, which can create a shortage of supply. This could lead to not all consumers having access to prescription medicines, as pharmaceutical companies may choose to prioritize supplying markets where they can charge higher prices. This could also lead to a decrease in the development of new prescription medicines, as companies may not see a profitable market in countries with price ceilings.

In Some Countries,a Binding Price Ceiling Is Placed on Prescription