Many People Argue That the U

Many people argue that the U.S. government should control pharmaceutical prices. What would most likely happen as a result of this policy?

A) Lower prices would mean lower profits and hence less incentive for firms to engage in research and development of new drugs.
B) Government price controls on pharmaceuticals would lead to an increased standard of living.
C) The number of new drugs would increase as firms would compete for new markets.
D) Demand for pharmaceuticals would decrease as a result of the lower prices.

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