Description
Critically analyze the pros and cons of putting a price ceiling on prescription medicine. Make sure to use concepts from the chapter in this unit 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
Explanation & Answer
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Attached.
HEALTH
0
Pros and Cons of Putting Price Ceiling on Prescription Medication
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HEALTH
1
PROS AND CONS OF PUTTING PRICE CEILING ON PRESCRIPTION MEDICATION
Introduction
Price ceiling is a regulatory mechanism by the government used in controlling the price of
products. This is done by setting a maximum price beyond which a given product must not be sold,
doing this will be treated as a violation of the laws. Price ceilings are important in protecting
consumers from circumstances whereby the price of commodities could be costly. It also ensures
that the goods are affordable to every individual. Price ceiling seems important majorly when it
comes to products that are frequently needed by consumers such as prescription medicine.
Imposition of price limits has both advantages and disadvantages to both the consumers and the
producers (Steven, Rese & South, 2009).
Case 1
Pros
Certain illnesses ma...
