Asked by Ja'Lisa Hicks on Jul 03, 2024
Verified
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 decides to sell the drug at $5,000 but requires the patients to purchase periodic blood testing from them for $5,000.This is an example of
A) Tying
B) Bundling
C) Fraud,the company is not allowed to sell for any higher than the regulatory price
D) Both A&B
Tying
A business practice where a seller requires buyers to purchase a secondary product as a condition of buying a primary product.
Price Regulation
Government-imposed controls on the maximum or minimum allowable prices for certain goods or services, often to protect consumers.
Periodic Blood Testing
Medical tests that are done at regular intervals to monitor an individual's health or the progress of a disease.
- Review strategies implemented by firms to evade limits on price and rent settings.
Verified Answer
Learning Objectives
- Review strategies implemented by firms to evade limits on price and rent settings.
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