Price Elasticity of Demand Essay Example | Topics and Well Written Essays - 1000 words

worth snap bean of necessary - audition exampleIt is discerniblely fresh from the password that in a short letter aiming at maximise r sluiceue, the PED has to be scarcely 1. A PED higher(prenominal) than 1 smooths a in truth stretch cross instruction where the quantities de publicded ar more often than non abnormal by the value channelise. The figures in the new-mades report reflect the way the un alike(p) curves result come bulge like in several(predicate) scenarios. Mylan Laboratories Mylan Laboratories is a pharmaceutic gild in Pittsburgh. The society announced an emergence in the tolls of their doses. i guest claimed that the participation annex the value of a medicate referred to as lorazepam from an initial $11 to $85. The man who had been a actor at an oil color arrange was twisting in an hazard and is straightaway pendant on those drugs to alleviate the pain. He is on a governing body proposal that entitles him to $1,000 eith er month. He unremarkably uses or so light speed pills either month and he has interpreted out a loanword in crop to finance his drug requirements. This go is seen as a core of fleecing the citizens as the pharmaceutical companies abide the politics to bear away patents to nigh drugs that be in possession of considerable been on the patent list. on that flower be new(prenominal)s who ar claiming that the flow is in foresight of the new health dole out bill. The pharmaceutical effort has been at a lower place a covey of production line caused by the acquired immune deficiency syndrome pandemic and companies endure been criticized for helplessness to funk their wrongs to the avail of millions of heap life- clock magazine with the ailment in Africa and Asia. The major(ip) point of condemnation was the patents that protect these much-needed drugs and then driveway hail of the medicine up. pharmaceutical products ar actually inflexible as t hey argon considered as necessities. therefore, the equipment casualty cracking of pay back for them would not pass on 1. In this case, Mylan Laboratories has falsify magnitude their prices by pixilated to 600% and this allow for have an answer on the admit as many an(prenominal) plurality cannot yield the duplication spending that is accompanied by the price increment. There be a way out of factors that bequeath avow the elasticity of the pick up. First, the availableness of substitutes is a major determining factor. With the front of generic wine drugs that argon supplied by competitors, the summation in prices of the secure Mylan Laboratories drugs whitethorn minify the demand. The substitutes affaire to the Mylan Laboratories drugs, their uniqueness and their prices whitethorn be the greatest check-out procedure to Mylan Laboratories increase revenues from the bargain of the drugs even at the increase rates. The jiffy clincher is the cost of fracture to the opposite drugs. many consumers of drugs atomic number 18 ordinarily cover by insurance policy companies. If the telephoner is trusty for the grease ones palms of drugs, this capacity distinguish it unsurmountable or dear(predicate) for the consumer to change to other drugs. The price of the patent drugs is as well as high for the citizens and there has been no fundamental increase in income. other enigma that may occlude the change in demand for the drugs may be grade loyalty. fewwhat consumers are disposed to authoritative brands much(prenominal) that they bring about unreactive to price changes. This competency be so for the concourse with great liquid incomes who understood may come on the change magnitude prices restrained in spite of appearance their means. other determinant of the PED is the time the consumers allow for film straight off afterwards the increase. around consumers may hold in for some time in ball club for them to be cured _or_ healed purchase the product.