What happens to the price and quantity sold of a drug when its patent runs out? (i)
The price will fall.
(ii)
The quantity sold will fall.
(iii)
The marginal cost of producing the drug will rise.
A)(i) only
B)(i) and (ii) only
C)(ii) and (iii) only
D)(i), (ii), and (iii)

Question

Quizplus · Accepted Answer

When a drug's patent expires, generic manufacturers can enter the market, increasing competition and typically leading to a decrease in price. The quantity sold usually increases due to the lower price and wider availability. The marginal cost of producing the drug does not necessarily rise.

What Happens to the Price and Quantity Sold of a Drug