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Nuheen
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#161
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#161
I corrected Anubis's (I know I again wrote it incorrectly here ) name. It is hard to spell, so sorry about typing the wrong name. I just copy pasted this time
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Champagne Breakfast
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#162
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#162
Discuss how economics can solve the problem of AIDs in Africa.
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ÁňûβİŚ
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#163
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#163
(Original post by Nuheen)
I corrected Anubis's (I know I again wrote it incorrectly here ) name. It is hard to spell, so sorry about typing the wrong name. I just copy pasted this time
its okay...just asked..frankly, i have to log in doing the same thing, copy pasting. me and my funny ideas...i thought it wud look great, now its a big problem! i have applied for a change...

(Original post by nooodle)
lets discuss economics
(Original post by The Ace is Back )
Discuss how economics can solve the problem of AIDs in Africa
i'm sorry...i guess our members are eagerly waiting to discuss how increasing the Statutory Liquidity Ratio wud lead to a proportionate decrease in Variable Reserve ratio and how central banks can use it to control credit availability in market....:cool:
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Champagne Breakfast
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#164
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(Original post by ÁňûβİŚ)
i'm sorry...i guess our members are eagerly waiting to discuss how increasing the Statutory Liquidity Ratio wud lead to a proportionate decrease in Variable Reserve ratio and how central banks can use it to control credit availability in market....:cool:
Pfffft, child's play.
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Nuheen
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#165
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#165
(Original post by The Ace is Back)
Discuss how economics can solve the problem of AIDs in Africa.
That is easy. Mass campaigning and subsidising condoms, I mean really subsidising it. Then the government can open training centres to teach how to wear them
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Champagne Breakfast
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#166
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I was thinking more along the lines of nationalising pharmaceutical companies/forcing them to provide AIDS drugs at the right prices for Africa. Can anyone tell me why they haven't done this?
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Nuheen
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#167
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#167
Aids drug? Aids currently has no medicine as far as I know. Besides, prevention is better than cure.
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Champagne Breakfast
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#168
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#168
No, AIDS drugs to extend the lifetimes of AIDS sufferers. Or HIV I can't remember. Either way, provide them at cheaper prices to Africa, thus opening up the market to people who are actually willing to pay the new prices and, for a while at least, solving the number one cause of deaths in Africa (I imagine that is AIDS). Once that is done, the workforce will be more productive, thus contributing to growth and higher income earnt. This actually provides an opportunity for African economies to do well and vaguely compete. As they get richer, they will be able to spend their own money on advertising campaigns and subsidising condoms, thus solving the problem. Pharmaceutical companies will be making more money by providing at cheaper prices to Africa because the size of the market will increase hugely. To prevent the cheap drugs flowing back to the States, clamp down on customs and threaten huge fines. If the governments try and steal all the money, we should invade and topple the regimes. After all, we invaded Iraq and Afghanistan for no reason, I'm sure Bush and Blair wouldn't have second thoughts about doing it again.
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Nuheen
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#169
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I dont know about that drug, but if it is present it is highly likely to be protected by patents, which will be very expensive to buy for an African country. So nationalisation may not work and private firms cant produce at such large quantities. They will prefer to supply less since the demand is quite inelastic I believe.
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Apagg
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#170
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#170
I was thinking more along the lines of nationalising pharmaceutical companies/forcing them to provide AIDS drugs at the right prices for Africa. Can anyone tell me why they haven't done this?
The first problem is that pharmaceuticals tend to be multinationals, so you couldn't nationalise them.
Secondly, if you forced them to sell the drugs at prices low enough for the average African, they'd have no incentive to continue to research and produce new drugs, as this is an incredibly expensive process.
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Champagne Breakfast
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#171
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#171
(Original post by Apagg)
The first problem is that pharmaceuticals tend to be multinationals, so you couldn't nationalise them.
Secondly, if you forced them to sell the drugs at prices low enough for the average African, they'd have no incentive to continue to research and produce new drugs, as this is an incredibly expensive process.
Is there no way multinationals can be forced to sell to Africa at the right prices?

Depends on elasticities; if it is price elastic, which I imagine it would be (it being Africa), it would open up the market and the companies should in theory be making even more money than they already are. There would still be incentive to continue R & D as that is one of the only ways pharmaceuticals can tap into new markets and get more money.
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Champagne Breakfast
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#172
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#172
(Original post by Nuheen)
I dont know about that drug, but if it is present it is highly likely to be protected by patents, which will be very expensive to buy for an African country. So nationalisation may not work and private firms cant produce at such large quantities. They will prefer to supply less since the demand is quite inelastic I believe.
I'm almost 100% certain the drug exists - it's not a cure as such, it merely keeps AIDS patients alive for longer and reduces the symptoms... something like that. Why can't private firms produce at such large quantities?
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Champagne Breakfast
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#173
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(Original post by Nuheen)
I dont know about that drug, but if it is present it is highly likely to be protected by patents, which will be very expensive to buy for an African country.
By the way, I'm not suggesting selling the patents to African countries, I'm suggesting that multinational pharmaceutical companies are forced to provide these drugs (drugs they already do provide) at cheaper prices. If not 'forced', then 'strongly encouraged' - work out some kind of incentives to get them to do it.
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Champagne Breakfast
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#174
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I want to read some Amartya Sen - what is his most famous work?
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Champagne Breakfast
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#175
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#175
(Original post by tanusha-tomsk)
Do you have any suggestions for taxation? I mean apart from taxing junk food? :rolleyes:
Plastic bags. Demand is pretty much price inelastic (eg in supermarkets.... I can't really see people walking out carrying everything they've bought) so this means an increase in revenue for the government, to be spent on various things like advertising campaigns (eg alcohol, drugs, tobacco, unhealthy food) or maybe even the state education system. Could potentially help the environment as well, depending on just how inelastic the demand is, as producers and consumers seek to use less plastic bags.

Taxing chopsticks was an awesome idea. Does anyone think selling disposable chopsticks to Chinese restaurants across the world would be profitable?
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Apagg
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#176
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(Original post by The Ace is Back)
Is there no way multinationals can be forced to sell to Africa at the right prices?

Depends on elasticities; if it is price elastic, which I imagine it would be (it being Africa), it would open up the market and the companies should in theory be making even more money than they already are. There would still be incentive to continue R & D as that is one of the only ways pharmaceuticals can tap into new markets and get more money.
I don't feel like looking it up, but I believe that some companies already substantially reduce the price of drugs for Africa.
A life saving drug is actually price inelastic. As soon as it becomes affordable, it will be bought. The problem is that if anything is priced high enough, it becomes price elastic. (Imagine if a cup of water required you to remortgage your house)

As regards your question about Sen, his "Development as Freedom" is quite thought provoking.
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Champagne Breakfast
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#177
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(Original post by Apagg)
I don't feel like looking it up, but I believe that some companies already substantially reduce the price of drugs for Africa.
A life saving drug is actually price inelastic. As soon as it becomes affordable, it will be bought. The problem is that if anything is priced high enough, it becomes price elastic. (Imagine if a cup of water required you to remortgage your house)

As regards your question about Sen, his "Development as Freedom" is quite thought provoking.
You mean, an inelastic PED kind of starts curving more and more to the left once it hits a certain price?

Anyhow I think the PED for AIDS drugs in Africa would currently be elastic as AIDS is more the 'norm' over there and perhaps the Africans place more emphasis on food and clothing. How are you supposed to find out things like this?

So if the price elasticity is currently elastic, then reducing prices would open up the market substantially and bring in more profits, surely?

Will take a look at that book, thanks.
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Apagg
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#178
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There's basically zero effective demand among the populace at the current price level. To reduce it to an affordable level in a country where the average income is $1 a day or less would simply not produce the kind of profits a pharmaceutical company is after.
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Champagne Breakfast
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#179
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(Original post by Apagg)
There's basically zero effective demand among the populace at the current price level. To reduce it to an affordable level in a country where the average income is $1 a day or less would simply not produce the kind of profits a pharmaceutical company is after.
The drugs themselves aren't particularly expensive to reproduce. Producing them at the cost of factors of production to Africans would be ample for the pharmaceutical companies, for as you say there is effectively zero demand at the current price level. Any extra demand then is surely a good thing? If they have these drugs priced at a certain level and nobody's buying them because they're too expensive, they can only make more money by ensuring these people can buy them.

If tax-based incentives don't work, I don't see why governments shouldn't get together and just force these companies to produce at lower costs.
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Apagg
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#180
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#180
I don't think that pricing at cost will bring them into the budget of most Africans. The only way to make the drugs affordable would be to sell below cost, making a loss on each unit sold. No sensible company will do that.
If governments get together and force the companies to produce at lower costs, the companies will tell them where to shove their regulation and either
a) Move to the Caymans
or
b) Stop researching altogether now they can no longer turn a profit
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