When a firm discovers a new pharmaceutical drug, it will have a patent. What will happen to the price of the drug
when the patent runs out, and why?
a. Decreases, as the market becomes more competitive, the price falls to equal marginal cost.
b. Decreases, because the demand for the drug decreases as people have now mostly been cured.
c. Remains the same, because the patients get the same drug.
d. Increases, because the demand for the drug increases.