Q 1: In October 2019, the government of the Philippines imposed a price ceiling on 120 prescription medicines which included medicines for hypertension, diabetes, cardiovascular disease, chronic lung diseases and major cancers. It is expected that prices for these medicines will have an average price reduction of 56% from prevailing market prices.Source: Ray, Aika (2019) - see link:https://www.rappler.com/nation/242935-angara-back-imposing-price-ceiling-medicines.

What effect is this likely to have on the market for prescription medicines?What will happen to the quantity of prescription medicine demanded?What will happen to the quantity supplied?Who gains?Who loses? Draw a diagram to support your answer. (5 marks)