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(1) Write about the economic reasons pharmaceutical companies like those listed above can increase prices the way that they have and remain profitable. This description should not contain any government actions, but characteristics about consumers and firms in this market. (2) Then, consider a price ceiling on pharmaceutical drugs (such as those above). Present both pros and cons of a price ceiling in this market from an economic viewpoint. Include two sources (preferably one “pro” source and one “con” source) to support your arguments. The goal of this exercise is for you to produce a short essay explaining the economic reasons why the US should implement a price ceiling in this case, and why the US should not. Both views should be supported by economic concepts/arguments (costs, quality, efficiency, etc.).

Date Posted: 10/10/2020
Category: Economics
Due Date: 12/10/2020
Instruction
Read this article about the drug Daraprim, which was made famous when “Pharma Bro” Martin Shkreli increased the price from $13.50 per tablet to $750 per tablet overnight. This is not an isolated incident, see EpiPen and Acthar for two more examples. Instructions are in the attached pdf
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