When Generic Drugs Enter the Market After the Patent for a Brand

question 55

Multiple Choice

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.

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