In debating whether drug companies have high rates of return or moderate rates of return, economists favoring the drug industry's point of view are that those opposing it overlook one key factor that, if you ignore, leads to an overstated rate of return. It is the
A. opportunity cost of the money invested in the invention and testing of the drug.
B. costs of invention.
C. marketing costs.
D. costs of testing.
Answer: A
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Which of the following types of economic regulation is most likely to encourage firms to inflate their costs?
A) price cap regulation B) rate of return regulation C) cartel regulation D) earnings sharing and price cap regulation
What is meant by operating profit or net operating revenue?
What will be an ideal response?
A decrease in the money supply will immediately __________ the __________ interest rate, according to the "liquidity effect."
A) raise; natural B) raise; nominal C) lower; natural D) lower; nominal
The opportunity cost of any good or service is the
A. actual dollar cost of doing or making it. B. highest price that a seller can get for the item. C. value of the next best alternative. D. cost associated with a value judgment. E. cost of producing the good or service.