Question

Shawn McGill is on the executive board for ABC pharmaceuticals. The company produces the number-one-selling cancer-

ghting drug on the market. Due to its incredible success, ABC Pharmaceuticals has decided to increase the cost of the
drug from $8 a pill to $15 a pill. Which force is ABC Pharmaceutical using to increase its drug price?
A. Supplier power.
B. Buyer power.
C. Threat of false entrants.
D. Business power.

Answer 1

A

Step-by-step explanation:

ABC is the producer of the drug, therefore not the buyer.

While they could be concerned about new Entrants, that is not 'a force' nor a mechanism to block new entrants. You might lower price to block new entrants but raising prices will have them seeking alternatives.

Business power is too generic and meaningless of an answer.