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.

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 increased availability, not decreases. The marginal cost of producing the drug does not necessarily rise; it may remain the same or even decrease due to economies of scale.

What Happens to the Price and Quantity Sold of a Drug