Suppose That GSK Sells One of Its Drugs for $25/pill

question 179

Multiple Choice

Suppose that GSK sells one of its drugs for $25/pill in the United States and $13/pill in Canada. Which of the following statements is TRUE?
I. The price discrimination benefits the Canadians since they pay a lower price.
II. The price discrimination benefits the Americans since GSK's larger profits means more research and development of new drugs for Americans.
III. Price discrimination is beneficial in industries with large fixed costs, since price discrimination increases the size of the market, helping to spread large costs over a greater number of consumers.

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

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Definitions:

Serotonin Levels

The concentration of serotonin, a neurotransmitter involved in the regulation of mood, sleep, and appetite, in the human body.

Caloric Intake

The total number of calories consumed through eating and drinking, which is a critical factor in managing weight and nutrition.

Body Weight

A measurement of a person's mass or heaviness, often associated with health and fitness.

Resting Metabolic Rate

The rate at which the body expends energy while at rest, crucial for maintaining basic bodily functions such as breathing and circulation.