Why would the firm price the contraceptive differently in different countries?
Wyeth-Ayerst Laboratories developed Norplant
Subject: Economics / General Economics
Question
Wyeth-Ayerst Laboratories developed Norplant, a long-acting contraceptive, in the early 1990s. In the United
States, the firm priced the contraceptive at $350, and in other countries, the firm priced it at $23.
See the section “Price Discrimination” in the Chapter
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[a] Why would the firm price the contraceptive differently in different countries? Explain your reasoning.
[b] Assume the firm has a world-wide patent on the production of the product. Why might it be nonetheless
difficult to maintain this pricing strategy?
