Critically analyze the pros and cons of putting a
price ceiling on prescription medicine. Make sure to use concepts from both such as government intervention, inefficiencies, price
elasticity, etc. in your answer.
In the first
case, assume the medication is for a life threatening illness for which your
child has been diagnosed.
In a second
case, assume the medication is for an improved quality of life issue, such as
achieving a healthy weight.
What are the
impacts that the pharmaceutical company that makes the medications in question
will experience? How will that affect the pharmaceutical company’s production
decisions? What about its decisions to conduct further research into new drugs?