If the government imposes a price ceiling on patented drugs such that it is still profitable, then production of the drug will .

not change

No worries! We‘ve got your back. Try BYJU‘S free classes today!

be stopped

No worries! We‘ve got your back. Try BYJU‘S free classes today!

decrease

No worries! We‘ve got your back. Try BYJU‘S free classes today!

increase

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D increase
Production of the drug will increase because the lower price will imply greater demand and the new price will become the marginal revenue.

Suggest Corrections

Similar questions

If governments put a price ceiling on patented drugs, what will happen to the production of the drugs?

Define Price Floor. What is the common purpose of fixation of floor price by the government ? Explain any one likely consequence of this nature of intervention by the government.

Define Price Ceiling. What is the common purpose for the price ceiling imposed by the government? Explain any one likely consequence of this nature of intervention by the government in the price determination process.

Can you think of any commodity on which price ceiling is imposed in India? What may be the consequence of price-ceiling?

Q. Q25. Consider the following statements
1. The government fixes ceiling prices of all drugs under the National List of Essential Medicines (NLEM).
2. Price fixation of drugs in NLEM is carried out by the National Pharmaceutical Pricing Authority (NPPA).
Identify the correct statements from the options given below

Can you think of any commodity on which price ceiling is imposed in India? What may be the consequences of price ceiling?

Join BYJU'S Learning Program

If the government imposes a price ceiling on patented drugs such that it is still profitable, then production of the drug will .

The correct option is D increaseProduction of the drug will increase because the lower price will imply greater demand and the new price will become the marginal revenue.

The correct option is D increase
Production of the drug will increase because the lower price will imply greater demand and the new price will become the marginal revenue.