Answered: Suppose that a new drug has been…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that a new drug has been approved to treat a life-threatening disease. The
demand for that drug is shown on the graph below. Prior to approval of this drug, the
only treatment for this condition was any one of several non-prescription, or
over-the-counter, pain relievers. The demand for one brand of the several
non-prescription pain relievers is also shown on the graph.
Demand for the new drug is ________ while demand for one brand of the over-the-counter pain relievers is ________.
A) the horizontal line at $60; the line labeled B
B) the line labeled B; the line labeled A
C) the line labeled A; the line labeled B
D) the vertical line at 100; the line labeled A

75
A
70
65
60
55
50
45
40
35
30
25
20
15
10
В
5
100
200
300
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625
Quantity
Price ($)

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