When generic drugs enter the market after the patent for a brand name drug expires, the price of the brand name drug often increases. This is usually due to
A) the demand curve for the brand name drug shifting in but becoming more inelastic.
B) the demand curve for the brand name drug not shifting, but the marginal cost of producing the good increases.
C) the demand curve for the brand name drug shifting in but becoming more elastic.
D) the demand curve for the brand name drug not shifting, but loyal customers are willing to pay a higher price for the brand name drug.
A
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Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. Suppose Leo earns $10. He will lose ________ from each benefit, for a total loss of ________.
A. $7.50; $15.00 B. $7.50; $7.50 C. $.75; $1.50 D. $.75; $1.00
Which of the following will not increase the rate of growth in an economy?
a. a reduction in the rate of savings b. an increase in the productivity of labor c. technological progress d. higher rates of investment
Exhibit 11-6 Aggregate demand and supply model
In Exhibit 11-6, if the aggregate demand curve is at AD1, the government should:
A. raise taxes to move to AD2. B. cut taxes to move to AD2. C. cut taxes to move to AD3. D. cut spending to move to AD2.
Suppose we are studying the market for electricity provision.
Suppose we are studying the market for electricity provision. Electricity provision requires costly grids and cables, thus Electricity production exhibits economies of scale in the long-run. In a given region there is only one electricity provider.
Below is the graph depicting the market for regional electricity providers:
What is the profit maximizing level of output?
What price will the firm set?
How much more output would be produced at the competitive market equilibrium?
What is the dead weight loss at the monopoly market outcome?
True/False. Electricity provision is a monopoly market because of patent protection.
True/False. The firm earns positive profit at the monopoly market outcomes.
More competing firms enter the electricity market. What will happen.