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Nexium and Protonix are 2 drugs that may be used to treat stomach ulcers. To purchase either of these drugs, prescription from an internal medicine...

This question was answered on Sep 18, 2012. View the Answer
1. Nexium and Protonix are 2 drugs that may be used to treat stomach ulcers. To purchase
either of these drugs, prescription from an internal medicine practitioner is required.
Suppose,
Price elasticity of demand for prescriptions = -0.60, and
Cross price elasticity of demand between Nexium and Protonix = 0.60
a. Are Nexium and Protonix complements or substitutes? Explain. [2 point]
b. If the fee for internal medicine practitioners goes up by 5%, calculate the change
in the quantity of prescriptions for Nexium? Interpret your result. [4 points]
c. If price of Nexium falls by 2%, calculate the change in the quantity demanded for
Protonix? Interpret your result. [4 points]
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Economics-8359000.doc

1. Nexium and Protonix are 2 drugs that may be used to treat stomach ulcers. To purchaseeither of these
drugs, prescription from an internal medicine practitioner is required.Suppose, Price...

This question was asked on Sep 17, 2012 and answered on Sep 18, 2012.

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