In recent years, the U.S. governments Food and Drug Administration (FDA) has required many pharmaceutical companies to

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In recent years, the U.S. government’s Food and Drug Administration (FDA) has required many pharmaceutical companies to use higher-cost production techniques (with more quality controls) to produce drugs. At the same time, the government has prevented companies from raising their prices to account for the higher expenses. How do you think these regulations affect the incentives of pharmaceutical companies?

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