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lectur6-page13 - Would you want drug companies to quickly...

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13 13 Free Enterprise and Free Choice (An Extension of Property Rights) u The ultimate voter is the consumer, he/she votes with dollars, and decides which product will survive This reasoning is known as consumer sovereignty , where the ultimate purchaser of goods and services determines what is produced . In pure capitalism, the consumer is king or queen. The consumer ultimately determines which commodities will survive in the market place. Only those commodities that consumers are willing to pay a price above the full cost of producing and distributing will continue to be produced. But along with this comes the caveat of “buyer beware” and “buy at your own risk”. Government has chosen to limit the production and distribution of some commodities because of the cost, or potential cost, that society may incur from a commodity before society has enough time to evaluate the product and determine to ultimately accept the product or reject the product; may be substantial.
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Unformatted text preview: Would you want drug companies to quickly release new drugs to the market without careful and prudent testing? Drug companies may have incentive to release a drug too quick in anticipation of large profits. The Federal Drug Administration (FDA) is charged with protecting consumers by assuring proper drug testing before a drug reaches market. This is of course is no guarantee. The allergy medication Seldane was approved and released, and I used it myself. But after being on the market for a while, a dangerous drug interaction was discovered. Seldane plus a common antibiotic, erythromyacin, proved to be a deadly combination. Sure, if a drug company were to behave irresponsibly you can sue, but what cost have you incurred in the event that someone dies. Will the law suit bring back a family member? There are market imperfections associated with pure capitalism that government tries to mitigate through regulation....
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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