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

question 157

Multiple Choice

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.

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Definitions:

Proposal

A formal suggestion or plan, typically detailed in a document, outlining a course of action or project.

Excise Tax

A tax imposed on specific goods, services, or transactions, often with the goal of discouraging their consumption or generating revenue.

Imposed

Placed or set upon as an obligatory requirement, often by authority.

Good

An item or product that is produced and consumed to satisfy human wants or needs.