ECO- Wyeth-Ayerst Laboratories developed Norplant

Wyeth-Ayerst Laboratories developed Norplant, a long-acting contraceptive, in the early 1990s. In the United States, the firm priced the contraceptive at $350, and in other countries, the firm priced it at $23.

See the section “Price Discrimination” in the Chapter

[a] Why would the firm price the contraceptive differently in different countries? Explain your reasoning.


[b] Assume the firm has a world-wide patent on the production of the product. Why might it be nonetheless difficult to maintain this pricing strategy?