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.If the manufacturer of the new drug chose to increase its price from $30 to $40,consumers would acquire ______ doses,and have _____ total expenditures.
A)more;higher
B)fewer;lower
C)more;lower
D)fewer;higher

Question

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.If the manufacturer of the new drug chose to increase its price from $30 to $40,consumers would acquire ______ doses,and have _____ total expenditures.
A)more;higher 
B)fewer;lower 
C)more;lower 
D)fewer;higher

Quizplus · Accepted Answer

In the lower half of a linear demand curve demand is inelastic and a price increase will increase total expenditures while reducing quantity consumed.

Suppose That a New Drug Has Been Approved to Treat