Question
In economics, we have learnt that related good's price does matter. Given the budget constraint and everything else remains the same, an individual consumer switches
In economics, we have learnt that related good's price does matter. Given the budget constraint and
everything else remains the same, an individual consumer switches to relatively cheaper goods (also
known as substitution effect).
Often when you visit a chemist shop with your doctor's prescription, your pharmacist may ask whether
you are interested in buying a relatively cheaper drug (which is biologically equivalent to your prescribed
drug) if it is available. Read the article carefully titled "Economists throw doubt on generic drug price advantage over branded version".1 Explain what seems to be a problem that may arise when one
switches to a cheaper drug.
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