Question
I am not able to answer these question. 1. Mylan Pharmaceutical and price rebates Imagine that the company Mylan Pharmaceutical has a monopoly in the
I am not able to answer these question.
1.Mylan Pharmaceutical and price rebates
Imagine that the company Mylan Pharmaceutical has a monopoly in the EpiPen market, but the government forces the company to offer rebates to low-income customers.That is, customers have to prove that they have a low-income in order to get the rebates. Which of the following is true given these rebates?Check all that apply!
-Mylan's profits would increase
-This is called implicit price discrimination
-This is called explicit price discrimination
-P < MC
-Mylan's profits would not change
-The market demand curve would become perfectly elastic
-Mylan's profits would decrease
-This is called perfect price discrimination
-P > MC
I need to check which are corrects in this.
2.Competition in the EpiPen market
If more and more pharmaceutical firms enter the EpiPen market because there is profit to be made and there are no barriers to entry, which of the following is true?Check all that apply!
-Deadweight loss would decrease
-In the long run, P < ATC
-Consumer surplus would increase
-There would be no change to P in the market
-In the long run, P > ATC
-Consumer surplus would decrease
-Deadweight loss would increase
-In the long run, P = ATC
which one goes here?
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