New Age Pharmaceuticals Inc. produces two limited lines of drugs—one for common maladies and one for rarer conditions and diseases. The majority of its business comes from the tried-and-true drugs that most Americans have been using for many years, but the new growth area in the pharmaceutical industry is in high-priced new drugs. New Age management believes that the company’s research-and-development operations are sufficiently effective and efficient enough to develop six new prescription drugs that will start showing a profit within 12 months of their roll-outs. Currently more than 4 million people use New Age products.
-An exception to the New Age demand curve may occur if diabetes patients are willing to pay the price for an effective new drug regardless of the supply that New Age makes available.

Question

Quizplus · Accepted Answer

An exception to the demand curve can occur if consumers are willing to pay any price for a product, such as a life-saving drug, regardless of its supply, indicating inelastic demand.