Using the curves for a monopolist with a patented drug product in the short run, answer 1a – 1c.      How much drug product should this firm produce to maximize its profit? ____  In order to maximize its profit, what price should the firm charge for its drug product? _______  What is the maximum hourly profit that the firm can earn from its drug product? ____

Managerial Economics: A Problem Solving Approach
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ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter20: The Problem Of Adverse Selection Moral Hazard
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  1. Using the curves for a monopolist with a patented drug product in the short run, answer 1a – 1c.   

 

How much drug product should this firm produce to maximize its profit? ____ 

In order to maximize its profit, what price should the firm charge for its drug product? _______ 

What is the maximum hourly profit that the firm can earn from its drug product? ____ 

 

Price,
costs,
and
revenue
per dose
(dollars)
50
45
40
35
30
25
20
15
10
5
MR
0 1 2 3 4 5
-MC-
ATC
D
6 7 8 9 10
Quantity of vaccine
(hundreds of doses per hour)
Transcribed Image Text:Price, costs, and revenue per dose (dollars) 50 45 40 35 30 25 20 15 10 5 MR 0 1 2 3 4 5 -MC- ATC D 6 7 8 9 10 Quantity of vaccine (hundreds of doses per hour)
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