1. Suppose that a pharmaceutical company holds a patent on Ruxima, an important antibiotic, but the patent will expire in the coming year. After the patent expires, other firms can legally sell the same medication as a generic drug product. What will happen to the demand for Ruxima and to the firm's markup for this product ((P-MC)/P) as the generic drugs enter the market?

A.Demand becomes more elastic, markup increases.

B.Demand becomes more elastic, markup declines.

C.Demand becomes less elastic, markup increases.

D.Demand becomes less elastic, markup declines.