Question

As the Trump Administration finalized a new regulation designed to lower prescription drug​ prices, two Republican senators also introduced legislation to cap domestic pricing at foreign prices. The bill would likely backfire and deprive Americans of lifesaving medicines. Such restrictions make companies unable or unwilling to sell their drugs in foreign countries. Americans have access to​ 95% of cancer drugs released worldwide between 2011 and 2018. But patients in Canada have access to only​ 58% and in the United Kingdom to just​ 74%. ​Source: The National Center for Public Policy​ Research, May​ 13, 2019 Are the proposed price controls price floors or price​ ceilings? Question content area bottom left Part 1 The price controls described in the news clip are​ ______.

Answer 1

The proposed legislation to cap domestic prescription drug pricing at foreign prices represents a price ceiling, which is a legal maximum price set to keep consumer costs low.

Step-by-step explanation:

The price controls described in the news clip are an example of a price ceiling. A price ceiling is a legal maximum on the price at which a good can be sold, in this case, prescription drugs. It is intended to keep prices low for consumers. This contrasts with a price floor, which is a legal minimum on the price at which a good can be sold. The intention behind the proposed legislation to cap domestic pricing at foreign prices is to prevent prices from rising above a certain level, with the aim of making prescription drugs more affordable for consumers.