The drug maker Wyeth produces the hormone-therapy drug Premarin, which is derived from the urine of pregnant mares. Not even Wyeth knows exactly what chemicals are in it, and the method of making the drug is a trade secret. Barr Laboratories has been trying to make a pill that is close enough to Premarin to be approved by the U.S. Food and Drug Administration as an "equivalent" drug. This story illustrates the importance of:
A. declining long-run cost curves as a way of preserving monopoly.
B. economies of scope in cementing a monopoly position.
C. barriers to entry in keeping a monopoly position.
D. declining demand curves as an essential ingredient in keeping monopoly.
Answer: C
You might also like to view...
Carve-out accounts
A. applies only to workers between 65 and 69 years of age. B. take funds away from the traditional social security system. C. has a tax rate of no more than 16.9 percent. D. all of these answer options are correct.
The dominant factor affecting medical care delivery and finance in the 1980s was
a. the Hill-Burton Act. b. prospective payment for hospitals. c. creation of Medicare and Medicaid. d. the explosive growth of managed care. e. ERISA.
According to the median voter theorem, majority rule will
a. always produce an inconclusive outcome. b. produce the outcome least preferred by the median voter. c. produce the outcome most preferred by the median voter. d. produce an outcome that is inconsistent with transitive preferences.
Vouchers allow students to
A. get free lunches at public schools. B. go to public schools at reduced rates. C. receive discounts on school supplies like pens and paper. D. all of these. E. none of these answer options are correct.