A study estimates that the price elasticity of demand for Lipitor is 1.05, but the price elasticity

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A study estimates that the price elasticity of demand for Lipitor is −1.05, but the price elasticity of demand for statins as a whole is −0.13.

a. Why is demand for Lipitor more elastic than for statins as a whole?

b. What would happen to revenues if the makers of Lipitor raised prices by 10 percent?

c. What would happen to industry revenues if all manufacturers raised prices by 10 percent?

d. Why are the answers so different? Does this difference make sense?

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Economics For Healthcare Managers

ISBN: 9781640550483

4th Edition

Authors: Robert Lee

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Question Posted: Oct 28, 2023 03:23 AM

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A study estimates that the price elasticity of demand for Lipitor is 1.05, but the price elasticity

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Lets analyze each part of your question a The elasticity of demand measures how sensitive the quantity demanded is to changes in price In this case th...View the full answer

Economics For Healthcare Managers

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