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:

Question

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After the expiration of patent protection, other firms can produce generic versions of the drug. This increases competition in the market, leading to a decrease in the price of the drug as consumers switch to less expensive options. As a result, the original firm's profits decrease, eventually eliminating economic profits entirely.

Research Has Shown That Most Economic Profits from Selling a Prescription