Question

Getchecked Inc. is a leading medical devices manufacturer. A cosmetic surgeon, Dr Matt Breen is discussing the prices Getchecked's medical devices with his colleague, Dr. Ed Walter Matt says, "Getchecked probably finds difficult to make profits. The medical device market is highly crowded." Ed replies, "Well, they do have quite a few patented products so the profits must be flowing in "Meanwhile James Radford, a medical technician, agrees tha Getchecked must be doing well. Given that Getchecked's products are widely used in the market, even an increase in prices would not affect sales or profits according to James Which of the following, if true, would weaken Matt's argument that Getchecked's profits are most likely negligible due to competition? A. Lifestyle-related diseases like diabetes and hypertension are on the rise in this country O B. Some firms in the market have started manufacturing medical devices that can be directly used by the final consumer O C. Product differentiation in terms of quality is common in this market because the buyers are very quality-conscious OD. Getchecked recently hiked the per-unit commission paid to its salesmen O E Doctors choose the brand of medical devices that should be used in the hospital

Answer 1

the answer is (c)

If the products are differentiated on the basis of quality, the market structure is not a perfect competition with no scope for profits but it is a monopolistic competition where profits can be made. It is possible that people prefer Getchecked's products due to their quality and increased competition as such will not affect their sales or profits much.

All other options are incorrect as they do not explain why the profits of Getchecked can be earned amidst competition.