Exhibit 3  Demand and cost curves for GeneTech, a monopolist with a patented vaccine

Consider Exhibit 9-3. Suppose GeneTech's patent expires and the market for the vaccine becomes perfectly competitive. Which of the following price and quantity combinations would be most likely?

When there is a shortage, producers raise prices in an attempt to

a. separate the quantity supplied and demanded b. raise the quantity demanded c. equalize the quantity supplied and demanded d. lower the quantity supplied

If a consumer purchases only two goods (x and y) and the demand for x is elastic, then a rise in the price of x:

a. will cause total spending on good y to rise. b. will cause total spending on good y to fall. c. will cause total spending on good y to remain unchanged. d. will have an indeterminate effect on total spending on good y.