Research Has Shown That Most Economic Profits from Selling a Prescription

question 92

Multiple Choice

Research has shown that most economic profits from selling a prescription drug are eliminated 20 years after the drug is first offered for sale.The main reason for the elimination of profits is

• A)after 20 years most people who have taken the drug have passed away or are cured of the illness the drug was intended to treat.
• B)firms sell their patent rights to other firms so that they can concentrate on finding drugs to treat new illnesses.
• C)the quantity demanded of the drug has increased enough that the demand becomes inelastic and revenue falls.
• D)after 20 years patent protection is ended and other firms can produce less-expensive generic versions of the drug.

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Definitions:

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