Which of the Following Factors Contributed to Addition of the Prescription

question 41

Multiple Choice

Which of the following factors contributed to addition of the prescription drug benefit to Medicare in 2003?

• A) Democrats broke the Republican filibuster and won a close vote for the bill, which the president then signed.
• B) Drug and insurance companies were limited in their lobbying efforts due to the struggling economy.
• C) Elderly voters and the AARP backed the Republican plan and helped to push it through Congress.
• D) Republican president George W. Bush promised to help seniors with rising drug costs and persuaded the drug companies to lower their prices.
• E) Young voters, worried about the rising costs of taking care of their parents, created an advocacy group to lobby for the prescription drug benefit.

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Definitions:

Price Elasticity

The measure of how much the quantity demanded of a good or service changes in response to a change in its price.

Demand

Pertains to the amount of a good or service that buyers are prepared and capable of buying at different price levels over a specified time frame.

Price Discrimination

The strategy of selling the same product at different prices to different customers, based on willingness to pay, without corresponding cost differences.

Price Discrimination Strategy

A pricing strategy where a company sells the same product to different buyers at different prices, based on what the seller believes each customer is willing to pay.