Suppose That a New Drug Has Been Approved to Treat

Multiple Choice

Suppose that a new drug has been approved to treat a life-threatening disease. The demand for that drug is shown on the graph below. Prior to approval of this drug, the only treatment for this condition was any one of several non-prescription, or over-the-counter, pain relievers. The demand for one brand of the several non-prescription pain relievers is also shown on the graph. The manufacturer of the new drug would ______ total revenue by increasing the price from $15 to $16.

A) increase
B) decrease
C) experience no change in
D) experience an uncertain change in