Suppose That GSK Sells One of Its Drugs for $25/pill

Multiple Choice

Suppose that GSK sells one of its drugs for $25/pill in the United States and $13/pill in Canada. Which of the following statements is TRUE?
I. The price discrimination benefits the Canadians since they pay a lower price.
II. The price discrimination benefits the Americans since GSK's larger profits means more research and development of new drugs for Americans.
III. Price discrimination is beneficial in industries with large fixed costs, since price discrimination increases the size of the market, helping to spread large costs over a greater number of consumers.

A) I only
B) I and II only
C) I and III only
D) I, II, and III