Economics For Today
Economics For Today
10th Edition
ISBN: 9781337670654
Author: Tucker
Publisher: Cengage
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Chapter 9, Problem 3SQP
To determine

Explain the reason for higher price for drugs in hospital and lower price in other drug stores.

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Why would a healthcare manager ever want to price discriminate?
Suppose the inverse demand curve for drugs is p(q) = 200 - 4q and the inverse supply curve is p(q) = q. Draw the supply and demand curves on the graph below. Label the current price and quantity, label and calculate the current producer and consumer surplus, and calculate and label the total revenue accumulating to suppliers in this market.
Should price controls be imposed on life-saving drugs? Will consumers benefit or be harmed by this type of regulation?
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