Some pharmaceutical companies hold patents on drugs, providing them with a period of exclusivity and pricing power before generic competitors enter the market. Their pricing power is an example of ______.

A. Cost Leadership
B. Regulatory Advantage
C. Network Effects

Correct Answer: B

An example of Network Effects would be Visa and Mastercard, as they operate widely accepted payment networks, giving them pricing power by charging fees to merchants and financial institutions for using their networks. Cost Leadership? Walmart.