The Price of Antibiotics Sends the Wrong Signal Because It

question 7

Multiple Choice

The price of antibiotics sends the wrong signal because it includes the:

• A) social cost but not the private cost.
• B) private cost but not the external cost.
• C) external cost but not the private cost.
• D) external cost but not the social cost.

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Definitions:

Standardized

refers to making something conform to a standard, ensuring consistency and uniformity across different situations or applications.

Differentiated

In a market, it refers to products that are distinguished from each other through variations in quality, features, branding, or customer service.

Oligopoly

A market structure in which a few firms sell either a standardized or differentiated product, into which entry is difficult, in which the firm has limited control over product price because of mutual interdependence (except when there is collusion among firms), and in which there is typically nonprice competition.

Homogeneous Product

A product that cannot be distinguished from competing products from different suppliers.