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Question: please can you provide a onepage answer to question number...

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Please, can you provide a one-page answer to question number 3! This component is essential!unheuser has strugsled with slow growth of t Market Senacthure Monopoly and Monopoistic Competition 221 ket beers in recent years. U.S. sales laws in its efforts to prevent an Israeli company from successfully selling a generie version of its cholesterol medicine, TriCor. Drug companies usually have three to 10 years of exclusive patent rights remaining when their products hit the market. However, they can often find ways to extend their monopolies by patenting slight improvements to those drugs. Twenty-five states and the Distriet of Columbia filed suit in federal court alleging that in addition to filing new patents on questionable improvements to TriCor, Abbott engaged in a practice known as product switching. This involves retiring ar existing drug and replacing it with a modified version that is marketed as new and improved, preventing pharmacists from substituting a generic for the branded drug when they nl prescriptions for it. Although this strategy is not illegal, the plaintiffs argue that Abbott employed it and other strategies solely to preserve its monopoly on TriCor suffered from greater competition from a its. There is increasing consolidation in the growth in mature markets, such as the have de range of beers, including smal -batch craf ers and imports, as well as from wine and spiha beer industry as brewers try to balance sloi ed States and Westem Europe, with rapid Or th in emerging markets such as China and Europe. There are also increasing for commodities, such as barley aluminum, and glass, making it important to InBev has only a tiny presence in the United States and would like to acquire Anheuser, which has led the U.S. industry since 1957 ted? In Bev, which is intensely budget-conscious, sees out of Anheuser. The two companies have an opportunity to wring significant cost-savings relatively little geographic overlap. By mergin they could gain a stronger position in China, where they both have been expanding recently China is the worlds largest beer market by One year after TriCor hit the market in 1999 Israeli Teva Pharmaceuticals Industries applied to the Food and Drug Administration (FDA) to market a similar version of the drug. Abbott sued Teva for patent infringement, which triggered a 30-month waiting period during which the generic drug could not be launched while patent challenges were being debated. During the waiting period, Abbott altered its product, lowering the dosage and changing it to a tablet from a capsule. It filed for a patent on this modified form of TriCor, bought back the remaining supplies of the capsules and replaced them with the lower-dose tablet. When the 30 months had elapsed, Teva could no longer launch its generic drug because InBev has secured commitments from banks to provide at least $40 billion in debt financing for the merger. Its success in raising the financial capital is an indication that banks are willing to lend substantial sums to companies with investment-grade credit ratings despite the continued turmoil in the financial markets and the efforts of a number of institutions to raise capital. InBev also has the U.S. public to consider because many U.S. citizens believe that Budweiser remains it was no longer strictly bioequivalent to the modified TriCor a powerful symbol of Americana. A Florida couple recently started a Web site called SaveBudweiser.com to rally support against a sale to InBev This process was repeated again from 2002 to 2005. Teva filed a counter-suit alleging anti-trust law violation. The company argued that Abbotts a. Based on the concepts in this chapter, discuss the factors leading to this proposed takeover strategy would allow pharmaceutical comparies to protect their monopolies indefinitely Abbott said it has the right to protect its innovatiors and deaies switching formulations for the sole purpose of warding off generic competition. It said the two switches brought improvements for patients Teva argued that the drugs active ingredient stayed the same and that the supposed improvements were smoke screens. merger in the beer industry. What factors might create problens for the merger? in the pharmaceutical industry: State and federal authorities are examining 3. The following discussion describes a patent dispute whether Abbott Laboratories violated antitrustDescribe the role of patents as barriers to entry in the pharmaceutical industry. In the current business Wall media, follow up on this and other similar cases involving drug patents to determine the strategies that Shirley Street Journal, June 2, 2008 8 Wang TriCor Case May Illuminate Patent Limits,222 PART 1 Microeconomic Analyss drug firms are currently employing to maintain their market power retail pharmacies, and collect reprices a drug manufacturers. Walgreen exe say their chain does not plan to 4. The following discussion describes Walgreen Co.s new strategies in early 2008: fewer generic-drug launches are plan first half of 2008 compared with the profits are under pressure are pe same per Walgreen Co. thrived for decades by opening faster than its competitors and by filling U.S. prescription sasea grew more prescriptions per year than any other chain. But facing pressure from rivals, a weak economy in 2007, the slowest growth rate since te Walgreen has responded to this cha environment in part by expanding into specialty pharmacy sector the growing much faster than the over Sales market. and changes in the healthcare system, the com- nging pany is refashioning itself into a broad healthcare provider. In March 2008, Walgreen announced its rug plans to buy I-trax Inc. and Whole Health two companies that run a total of 350 health centers at corporate offices and that Walgreen executives plan to bring to Take Care Clinics, specialty operations, and workplace centers using electronic prescrins and medical records to cover a range of offer services from treating simple illnesses to counseling patients on managing diabetes. Walgreen expects to open more pharmacies at worksites and to attract employees, their family needs members, and retirees to its stores. The acquired Describe how this case study illustrates the of shifting market power described in thechape 5. Indicate whether each of the following s companies will form part of Walgreens nevw health and wellness division and will include Take Care Clinics, which operate 136 clinics is true or false, and explain your answer. a. If a monopolist is producing a level of outputz inside Walgreens stores. Walgreen has dropped its longtime aversion to acquisitions by purchasing specialty pharmacies which demand is inelastic, the firm is not mar mizing profits, and increasing output il decrease total revenue. that are experts in infertility, cancer, AIDS, and other conditions that are expensive to treat, and by opening pharmacies in hospitals and assisted-living facilities. b. When a monopolist maximizes profits, the price Investors are uncertain about this new approach In October 2007, Walgreen reported its first quarterly earnings decline in nearly a decade hurt by lower generic-drug reimbursements and higher store and advertising expenses. Meanwhile, two of Walgreens big rivals Wal-Mart Stores Inc. and CVS Caremark Corp., are expanding in what they consider a big growth area: the business of managing is greater than the marginal cost of produci the output. This means that consumers are willing to pay more for additional units of the product than these additional units cost to m duce. Thus, the monopolist should produce and sell additional units of output. c. A monopolistically competitive firm produxs a level of output at which price equals $80, ma ginal revenue equals $40, average total cost equals $100, marginal cost equals $40, and average fint cost equals $10. To maximize profit, the fin employer drug-benefit programs. CVS has staked its business on the future success of pharmacy-benefit managers (PBMs) by purchasing Caremark in 2007. PBMs provide prescription-drug coverage to workers at most Khould produce a smaller output and selliai higher price. d. In a monopolistically competitive Amy Merrick, How Walgreen Changed Its Prescription Growth, Wall Street Journal, March 19, 2008 firm has market power because it a differentiated product. This means the firm earns positive economie proft

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