Explore BrainMass

Explore BrainMass

    pharmaceutical industry's market structure

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Which market structure is best suited for a pharmaceutical industry (perfect competition, monopolistic competition, monopoly and oligopoly)

    If the industry decided to operate under one of the other three remaining marker structure, how would equilibrium price and equilibrium quantity differ? Would it be higher, lower, the same? Why

    © BrainMass Inc. brainmass.com October 9, 2019, 11:43 pm ad1c9bdddf

    Solution Preview

    The market structure best suited for the pharmaceutical industry is oligopoly. The primary reason being that pharmaceutical industry requires a lot of investment in research and development and either perfect competition or monopolistic competition do not provide enough incentive in terms of long term profits to encourage R&D. The consequence will be in case of either of those structures the market will stop producing new drugs and that will be harmful to the society.

    Monopoly provides long term profit but the catch is if there is a ...

    Solution Summary

    The most fitting for a pharmaceutical industry's market structure is discussed.