Dr. Jing Luo says the list price of insulin- the price set by manufacturers but not necessarily what patients or providers pay - has increased between 300% to 500%. That's because there are a limited number of manufactures in the U.S., he says. "When you have a setting where there [are] only a few suppliers, but the demand for the medication is quite great," he says, "it results in a situation where manufacturers can raise their prices without much blowback." While this doctor referred to supply and demand, there is another matter involved. Which of these is it? Elasticity O The Marginal Principle O Diminishing Returns
Dr. Jing Luo says the list price of insulin- the price set by manufacturers but not necessarily what patients or providers pay - has increased between 300% to 500%. That's because there are a limited number of manufactures in the U.S., he says. "When you have a setting where there [are] only a few suppliers, but the demand for the medication is quite great," he says, "it results in a situation where manufacturers can raise their prices without much blowback." While this doctor referred to supply and demand, there is another matter involved. Which of these is it? Elasticity O The Marginal Principle O Diminishing Returns
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 3SQP
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!['Dr. Jing Luo says the list price of insulin-
the price set by manufacturers but not
necessarily what patients or providers pay-
has increased between 300% to 500%. That's
because there are a limited number of
manufactures in the U.S., he says.
"When you have a setting where there [are]
only a few suppliers, but the demand for the
medication is quite great," he says, "it results
in a situation where manufacturers can raise
their prices without much blowback."
While this doctor referred to supply and
demand, there is another matter involved.
Which of these is it?
Elasticity
O The Marginal Principle
O Diminishing Returns](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F478c8595-7795-4a46-af76-ab0980cbd68e%2F0fa51661-fc2c-4785-ac21-cda7753cf57b%2Fxeclnt7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:'Dr. Jing Luo says the list price of insulin-
the price set by manufacturers but not
necessarily what patients or providers pay-
has increased between 300% to 500%. That's
because there are a limited number of
manufactures in the U.S., he says.
"When you have a setting where there [are]
only a few suppliers, but the demand for the
medication is quite great," he says, "it results
in a situation where manufacturers can raise
their prices without much blowback."
While this doctor referred to supply and
demand, there is another matter involved.
Which of these is it?
Elasticity
O The Marginal Principle
O Diminishing Returns
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