Imagine an illness with two cures--drug x and drug y. drug x and drug y are both made by the same firm.
two events recently happened. first, a study was released showing that drug x is less effective than drug y. second, the ingredients
used to produce drug xincreased in price. what are the consequences of these events?
choose one:
o a. the demand for drug x shifts to the right, and the supply of drug x shifts to the left. the result is a rise in the
equilibrium price for drug x and a fall in the equilibrium quantity of drug x.
o b. the demand for drug x shifts to the left, and the supply curve for drug x shifts to the left. the result is a rise in the
equilibrium price for drug x and a fall in the equilibrium quantity of drug x.
c. the demand for drug x shifts to the right, and the supply curve for drug x shifts to the left. the result is an unknown
change in the equilibrium price for drug x and a fall in the equilibrium quantity of drug x.
d. the demand for drug x shifts to the left, and the supply curve for drug x shifts to the left. the result is an unknown
change in the equilibrium price for drug x and a fall in the equilibrium quantity of drug x.