Suppose That a New Drug Has Been Approved to Treat

question 124

Multiple Choice

Suppose that a new drug has been approved to treat a life-threatening disease.Demand for that drug is shown on the graph below.Prior to approval of this drug,the only treatment for this condition was non-prescription pain relief.Demand for one brand of non-prescription pain reliever is also shown on the graph below.
Refer to the figure above.At a price of $15,price elasticity of demand for the new drug is _______ price elasticity of demand for an over-the-counter pain reliever.

• A) greater than
• B) less than
• C) the same as
• D) the reciprocal of

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