Several magazine articles documented the reluctance of AIDS drug manufacturers to provide relief to developing countries. The likely reason for this is:
A)the high cost of transportation.
B)their fears that arbitrage will severely cut into their profits.
C)the inability of the developing countries to pay for the drugs.
D)lack of compassion from their part.

Question

Quizplus · Accepted Answer

The fear of arbitrage, or the practice of buying goods in one market and selling them at a higher price in another market, is a common concern among drug manufacturers. They worry that if they provide drugs to developing countries at a lower price, those drugs may be resold in other markets at a higher price, cutting into their profits. This has led to a reluctance to provide relief to developing countries. The other options, such as cost of transportation and inability to pay, may be factors as well, but the primary reason is the fear of arbitrage. Lack of compassion cannot be determined as the sole reason without sufficient evidence.

Several Magazine Articles Documented the Reluctance of AIDS Drug Manufacturers