A proposal has been advanced to limit advertising of pharmaceutical prices to prevent unfair pricing by national chains. You estimate that limits on price advertising will make demand less elastic, changing the price elasticity of demand from -5.63 to -4.43. The marginal cost of a typical prescription is $40. The typical small pharmacy fills 25 prescriptions per day. A typical consumer fills 20 prescriptions per year. What will the economic effects of the limit be on consumers and pharmacists?

Who is likely to be the more effective advocate for their position?

Elasticity	MC	Price	Quantity	Profit
Pharmacists calculations	-5.63	40	$48.64	7,800	$67,387
	-4.43	40	$51.66	7,800	$90,962
					$23,575

Consumers' Calculations

	Price	Quantity	Spending
Consumers calculations	$48.64	20	$973
	$51.66	20	$1,033
			$60