Question

During the 2001 anthrax scare, the U.S. government threatened to disregard Bayer%u2019s patent of ciprofloxacin, the most effective drug to fight anthrax, and license the production of the drug to American drug companies to stockpile the drug in case of an anthrax epidemic. While the policy would lower costs to the U.S. government of stockpiling the drug, it also would have other costs. What are those costs?

Instructions: Select all that apply.

Lost profit by Bayer.

Fewer new drugs invented.

Higher current welfare loss.

Increased sunk costs by drug industry.

Answer 1

Consider the following explanation

Step-by-step explanation:

Option A, B and D are correct, It will reduce the profit of the company who is loosing the monopoly, and fewer drugs will be invented in the market and firms are loosing the monopoly, and the sunk cost will increase.