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NEW QUESTION 35
A pharmaceutical company was recently awarded a 20 year patent for a new medicine it has developed. Which of the following results could be a consequence of this patent? (Select all that apply.)

• A. The high price of the medicine will result in insufficient demand.
• B. The pharmaceutical company will charge higher prices for the drug.
• C. Pharmaceutical companies will be incentivized to develop new medicines in the future.
• D. The company will drive its competitors out of the pharmaceutical industry, limiting innovation.
• E. The cost to produce the medicine will remain high after the patent expires.

Answer: B,C

NEW QUESTION 36
The government decides to set a price ceiling on corn. The price ceiling is set 10% above the equilibrium price. What would be the result of this government action?

• A. There would be a shortage of corn.
• B. There would be a surplus of corn.
• C. Consumer surplus would increase.
• D. The price ceiling would have no effect on the market.

Answer: D

NEW QUESTION 37
A local tourism board wants the city government to set a maximum price that taxis can charge, in order to make the city more attractive to tourists. What might be a result of this price cap?

• A. Local residents will begin to use taxis more frequently.
• B. Total welfare (consumer surplus + producer surplus) will increase.
• C. The quality of taxis will improve.
• D. The number of taxis will decrease.

Answer: D

NEW QUESTION 38
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