Although Price Discrimination May Increase the Profits of Drug Companies

question 228

True/False

Although price discrimination may increase the profits of drug companies, it reduces the incentive for drug companies to develop new drugs.

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Definitions:

Capital Flight

The large-scale exodus of financial assets and capital from a nation due to economic or political instability.

Tax Credit

A direct reduction in tax liability, not merely a reduction in taxable income, that decreases the total tax bill directly.

Interest Rate

The cost of borrowing money or the return on saving, expressed as a percentage of the amount borrowed or saved.

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for another.