LE250 Microeconomics (A link to upload the assignment is provided in Week 13 module)Critical Response Assignment (worth 100 points) due Week 13Objectives:(1) After evaluating the microeconomic problem concerning the prices for prescription drugs,construct a personal perspective (BL5)(2) Apply and analyze microeconomic principles including the price mechanism, supply anddemand and the effect of price controls on an industry and consumers’ buying behavior (BL 3and 4)(3) Apply research, writing, and critical thinking skills to clearly express a message in APA format(BL3)There are very specific directions for following this assignment.Topic: Should government control the price of prescription drugs so that consumers pay less?Report Structure:Please structure your response as follows and include the headings in bold (ie. Part 1: Introduction,Part 2 include All of the information in Bold)Format your report according to APA style for a Business Report. You must use headings stated belowin bold.Create a Title Page (refer to a Guide Book on APA for this information)Make sure you number the pages in your report!At the end of your report: Create a Reference Page (minimum of 3 resources): the resources may bevideos, podcasts, articles, books, newspapers. If in doubt, contact the instructor. Report is to bedouble spaced.Part I: Factors that Influence the Price Consumers Living in America Pay for Prescription Drugs (onepage)Describe several expenses pharmaceutical companies encounter that contribute to the price ofprescription drugs. (In other words, generally speaking –describe typical expenses pharmaceuticalcompanies must pay for in order in order to develop and market their prescription drug)How does the health system (insurance company) influence the price consumers pay for prescriptiondrugs?How do intellectual property and patents drug manufactures hold affect prices?Rev. Fall 23Based on your knowledge of microeconomics, if there are many competitors that supply a similar drugwhat is the likely consequence on and price? Alternatively, if there are few competitors and the supplyis limited, what is the likely consequence on the price?Part 2: Reasons Why Government Should Regulate the Cost of Prescription Drugs (one page)From your research, describe two of the most important reasons that you have uncovered about whygovernment policies should be directed to controlling the price of prescription drugs.Do not just state the reason or give multiple reasons…. More than two. Each reason must be supportedby meaningful evidence that you have researched. Make sure you cite paraphrased information anddirect quotes. Do not plagiarize!For each reason, construct one paragraph of five to six sentences to fully provide evidence of yourreason. Do not write two paragraphs with multiple reasons.Part 3: Apply economic principles (one page maximum)Now it is time to apply microeconomic principles. You must address the following concepts:If government controls prices of prescription drugs that are sold to consumers, according tomicroeconomic principles what will happen:1) Will the supply of drugs increase or decrease? You must respond to:Will more sellers enter the market or leave the market? Explain why.Will sellers produce more prescription drugs or less prescription drugs? Explain why.2) Will producers of drugs be encouraged to innovate meaning invent new and better drugs?3) How will the demand for prescription drugs be affected if prices to consumers are loweredas compared to present prices? (If prices are below the true market price, will demandincrease or decrease.) Explain.4) Based on microeconomic principles of supply and demand, do you anticipate that there willbe a shortage or a surplus of prescription drugs? Explain.Part 4: Conclusion (one page maximum)Summarize the main points of your researchReflect: Explain your perspective. Do you believe that the government should set price controls onprescription drugs to lower the consumer’s price?Did researching information about this problem change your perspective in any way?