The demand function for a monopolist is given by: P1 = 1,250 – 3.5Q and the cost function is given by C(Q) = 1,200 +1.5Q + 0.8Q². This firm, Otsuka, is a pharmaceutical holding a patent on a depression treatment, Rexulti. However, the patent expired, and a generic treatment is offered in the market. Now, the new market price is P=$400. Based on this information, determine the following: (Use no decimals in final answers). a. The optimal Q with the pattent is: $ b. The optimal P with the pattent is: $ c. The optimal profits with the pattent is: $
The demand function for a monopolist is given by: P1 = 1,250 – 3.5Q and the cost function is given by C(Q) = 1,200 +1.5Q + 0.8Q². This firm, Otsuka, is a pharmaceutical holding a patent on a depression treatment, Rexulti. However, the patent expired, and a generic treatment is offered in the market. Now, the new market price is P=$400. Based on this information, determine the following: (Use no decimals in final answers). a. The optimal Q with the pattent is: $ b. The optimal P with the pattent is: $ c. The optimal profits with the pattent is: $
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.5P
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Transcribed Image Text:The demand function for a monopolist is given by: P1 = 1,250 – 3.5Q and the cost function is given by C(Q) = 1,200 +1.5Q + 0.8Q. This
firm, Otsuka, is a pharmaceutical holding a patent on a depression treatment, Rexulti. However, the patent expired, and a generic
treatment is offered in the market. Now, the new market price is P=$400. Based on this information, determine the following: (Use no
decimals in final answers).
%3D
a. The optimal Q with the pattent is: $
b. The optimal P with the pattent is: $
c. The optimal profits with the pattent is: $
d. The optimal Q with the generic treatment is: $
e. The optimal P with the generic treatment is: $
f. The optimal profits with the generic treatment is: $
g. In this which of the statement is correct?
(A, B, C, or D).
A. The lost of the patent changed the market condition from monopoly to oligopoly.
B. The lost of the patent changed the market condition from PCM to monopoly.
C. The lost of the patent changed the market conditions from monopoly to a more competitive market.
D. The generic treatment changed the market conditions from PCM to monopoly.
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