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Government regulators sometimes set the price of a drug at its marginal cost of production without including a fair share of the global joint cost
Government regulators sometimes set the price of a drug at its marginal cost of production without including a fair share of the global joint cost of research and development. Which of the following statements is true about this practice? A. This behavior is highly unlikely because every country pays its fair share of the cost of research and development. B. The described practice is almost impossible because development costs are easily divided among consumers and prices to reflect differences in the relative benefits each receives. C. Setting drug prices at the marginal cost of production expands the market and guarantees that total drug spending covers all costs, including fixed development costs. D. It assures consumers of the unlimited availability of the drug. E. This practice is a classic example of free riding
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