Reply to this classmate discussion board post, 100 words please, need by 1pm eastern time on sunday
Monopoly:
Pharmaceutical companies can be considered as monopoly as once they develop a drug, they have patents on it for some years before any other company can produce a substitute product. Best example I can give is of Turning Pharmaceuticals who acquired a drug in 2015 and raised the price of the drug from $13.50 to $750 overnight (CNBC, 2015). Sometimes price of the drugs increase due to shortages but for Turning pharmaceuticals, it was a plain monopoly.
Perfect Competition:
According to Chapter 8 of "Economics for Today", "No real world market exactly fits the three assumptions of perfect competition. The perfectly competitive market structure is a theoretical or ideal model, but some actual markets do approximate the model fairly closely. Examples include farm products markets, the stock market, and the foreign exchange market (Page, 214).
As the firms enter in competitive market, they take the price from the industry and that is why these are called Price Takers.
References:
Pollack, Andrew. "Drug goes from $13.50 a tablet to $750, overnight." CNBC.