Asked by Alexis Jones on Sep 24, 2024

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​A pharmaceutical company faces a price regulation where it cannot charge any higher than $5,000 for a lifesaving drug.The company knows that the patients put a high value on this product and are willing to pay up to $10,000 for it.The company will likely

A) ​Not do anything-it is prohibited by law to increase its price
B) Bundle the drug with periodic blood testing,selling the bundle for $10,000
C) Require that the patients have the drug administered by the company's medical staff,for an additional $5,000
D) ​Both B&C

Price Regulation

The imposition of controls by a government on the price(s) that can be charged for goods and services in a market.

Lifesaving Drug

A medication that is essential for survival, often used to treat a life-threatening condition or disease.

Bundle

The practice of selling multiple products or services together as a single combined unit, often at a reduced price compared to purchasing the items separately.

  • Analyze tactics companies adopt to sidestep controls on pricing and rental charges.
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JT
jocelyn torralba5 days ago
Final Answer :
D
Explanation :
Option B of bundling the drug with periodic blood testing is a valid strategy to increase the overall price of the product while still complying with the price regulation. By bundling the drug with an additional service, the company can justify the higher price point.

Option C of requiring the patients to have the drug administered by the company's medical staff for an additional fee is another effective strategy. The service provided by the company can be deemed necessary for the safe and effective use of the drug, which can justify the additional cost.

Therefore, the best approach for the company would be to implement both options B and C. By doing so, the company can increase its revenue while still adhering to the price regulation.