Prices to prevent unfair pricing by national chains

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A proposal has been advanced to limit advertising of pharmaceutical prices to prevent unfair pricing by national chains. You estimate that limits on price advertising will change the price elasticity of demand from -5.63 to -4.43. The marginal cost of a typical prescription is $40. A typical pharmacy fills 25 prescriptions per day. A typical consumer fills 20 prescriptions per year. What economic effects will the limit have on consumers and on pharmacist? Which group is likely to be the most effective advocate for its position?

Reference no: EM131391849

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