Microeconomic Principles: The Ethics of Big Data

1 Ethics of Big Data Describe the microeconomic principles being used. What is the impact for demand?

The aspect of a perfect competition market and monopolistic competition is very much evident from the article. In this case, firms are striving to compete with each other by taking advantage of big data using it in developing a sustainable competitive advantage. There are numerous sellers and numerous buyers in a perfect competition market, and the firms are always striving to compete with each other with homogeneous products. There is a lot of freedom, i.e., perfect knowledge and freedom of entry or exit.

Monopolistic competitions can tap big data as they differentiate their products.

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2 Evaluate the different market structures that big data benefits the least and the most from.

The market structures which are likely to benefit from big data are monopolistic competition. The market structures that most benefit from Big Data are the competition Monopolistic, a type of imperfect competition where many producers sell products in a market but the products are not identical (heterogeneous products) (Schwartz, 2010). They differ from each other by the brand, the quality, or the location. In monopolistic competition, a firm takes the prices of its rivals as data and ignores the impact of its prices on the prices of other companies. The one that can benefit less is the Oligopoly, a market structure in which there are few relevant competitors. The one that benefits the least from Big Data is the monopoly, as it is a market structure where there is a single offer of a certain good or service; that is, a single company dominates the entire supply market.

While data collection may benefit the business community, discuss the concerns for consumers as big data proliferates.

Come of the concerns as big data proliferates include growing risk of security breaches, anonymization may become impossible, unintentional discrimination, and that the data may not be entirely accurate.

Barriers to entry What purposes do barriers to entry created by the government serve?

Barriers to entry serve an important purpose because it is done to protect the integrity of the industry and prevent new entrants from introducing inferior products into the market. The potential competitors are prevented from entering the industry without meeting the required threshold.

What are other barriers to entry into the pharmaceutical industry?

Apart from the Food and Drug Administration (FDA) Approval, there are also other barriers such as Research and Development (R&D) Costs and Intellectual Property Challenges. For intellectual property, patents are often taken out to use as legal weapons by huge companies to fight off their competitors even if they do not plan on completing trials for the drug. The cost of bringing a new drug to market with post-approval research and development (R&D) costs is approximately $2.8 billion.

Should drug patents be extended to 20 years after FDA approval?

Yes. The chances are high that Longer-lasting patents would protect the profits that they need to keep innovative products moving through the pipeline.

Explain what would be the costs and benefits of this extension.

Some of the costs entail the fact that there may be no link between the patents and innovation unless proven beyond any reasonable doubt. Again, drug discovery more difficult, expensive, and timeconsuming. Drug manufacturers may face a financial crisis because of the expiration of the patents on many of their most profitable drugs. There may be breakthroughs as well.

3 References Frakt, A., & Piper, M. (2014). Microeconomics made simple: Basic microeconomic principles explained in 100 pages or less. Simple Subjects Schneider, G. E. (2019). Microeconomic principles and problems: A pluralist introduction. Routledge Schwartz, R. A. (2010). Micro Markets: A Market Structure Approach to Microeconomic Analysis. John Wiley & Sons