Suppose Well-Made Pharmaceuticals knows that its newest prescription drug can cause severe side-effects, but it doesn't inform the users of the prescriptions about these side-effects. When the side-effects become public knowledge after an investigation,

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When negative information about a product becomes public, demand typically decreases because consumers are less willing to purchase the product, knowing the risks. This decrease in demand leads to a lower equilibrium price as sellers try to make the product more attractive to consumers despite the negative information.

Suppose Well-Made Pharmaceuticals Knows That Its Newest Prescription Drug Can