Which of the Following Statements Is True of the Market

question 65

Multiple Choice

Which of the following statements is true of the market for prescription drugs in the U.S.?

• A)The FDA encourages the entry of new drugs in the market.
• B)The time required to bring a new drug to the market has declined over time.
• C)The drug manufacturing firms enjoy economies of scale,hence the cost of producing new drugs have declined.
• D)More than 60 percent of the biopharmaceutical products approved in the U.S.originated either in Europe or in Japan.
• E)The latest estimate of the cost to develop a new drug and bring it to market exceeds $800 million.

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Definitions:

Likelihood Probabilities

The probability of observing the given data under different parameter values of a statistical model, often used in the context of estimating those parameters.

Expected Payoff

The predicted value of an investment or decision under uncertainty, calculated as the sum of all possible outcomes weighed by their probabilities.

Perfect Information

A theoretical concept in economics and game theory where all parties have complete and accurate information about the game and its environment.

Expected Monetary Value

Expected Monetary Value (EMV) is a concept in decision-making that calculates the anticipated wealth from an investment or decision under uncertainty.