A-level ECONOMICS Paper 1 Markets and Market Failure

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Section A Answer EITHER Context 1 OR Context 2. EITHER Context 1 Total for this context: 40 marks The pharmaceutical industry Study Extracts A, B and C and then answer all parts of Context 1 whic... h follow. Extract A Figure 1: Profitability of new patented drugs Figure 2: Price of generic drugs compared to patented drugs, and number of manufacturers Year Mean rate of return on new drugs (%) 2010 10.1 2011 7.6 2012 7.3 2013 4.8 2014 5.5 2015 4.2 2016 4.2 2017 3.7 2018 1.9 2019 1.8 Source: Deloitte report, 2019 Note: the mean rate of return is the average profit a pharmaceutical company can expect to make on a new drug over its lifetime, as a percentage of its development cost. [Show More]

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