Experience with patents in the pharmaceutical industry shows that when patents on drugs expire
A) prices remain high without patent protection because of a lack of competition. Firms that are not granted patents cannot compete with firms that are granted patents.
B) other firms are free to produce chemically identical drugs. Competition reduces the profits that had been earned by the firms that received patents.
C) most patients will continue to buy the drugs from the same firms because their doctors recommend they buy brand-name drugs.
D) firms will find ways to obtain additional patent protection—often by making cosmetic changes in drugs that were patented—so that they can continue charging high prices.
B
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If you decide to go to a movie on a Friday night rather than write a letter to your grandmother, you
A) are willing to deprive your grandmother of a letter simply in order to enjoy a movie. B) place more value on the movie than on your grandmother. C) would rather have fun than fulfill your responsibilities to your relatives. D) none of the above.
The simple Keynesian model assumes that
A. gross private domestic investment exceeds net investment by the capital consumption allowance. B. aggregate demand will always equal aggregate supply. C. there will never be any excess capacity in the short run. D. prices, especially the price of wages, are "sticky downward."