The Chapter focuses on elasticity. One of the determinants of the price elasticity of demand is the number of substitutes for a particular good or service. Use the internet to examine the substitutes for pharmaceuticals. Go to the FDA site and find the approval list of new pharmaceuticals. Scroll through the listings and notice the number of recent drugs approved for the treatment of HIV infection.

Questions

1. How many substitutes are there for any one particular pharmaceutical directed toward HIV?
2. Draw a demand curve representing the demand for any one specific pharmaceutical.
3. Illustrate how an increased number of pharmaceuticals directed toward HIV would affect the demand in question 2.
4. Over the past few years, what has happened to the demand for any one specific pharmaceutical directed toward HIV? Has it become more or less price elastic? Has it shifted in or out? Explain.