Cornell Pharmaceutical, Inc., and Penn Medical, Ltd., supply generic drugs to treat a wide variety of illnesses. A major product for each company is a generic equivalent of an antibiotic used to treat postoperative infections. Proprietary cost and output information for each company reveal the following relations between price (marginal cost) and output:   P = $10 + $0.004Qc (Cornell)   P = $8 + $0.008 Qp (Penn)   1. Assuming these two firms make up the entire industry, determine the industry supply curve when P < $10.   2. Determine the industry supply curve when P > $10.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter14: Pricing Techniques And Analysis
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Cornell Pharmaceutical, Inc., and Penn Medical, Ltd., supply generic drugs to treat a wide variety of illnesses. A major product for each company is a generic equivalent of an antibiotic used to treat postoperative infections. Proprietary cost and output information for each company reveal the following relations between price (marginal cost) and output:

 

P = $10 + $0.004Qc (Cornell)

 

P = $8 + $0.008 Qp (Penn)

 

1. Assuming these two firms make up the entire industry, determine the industry supply curve when P < $10.

 

2. Determine the industry supply curve when P > $10.

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