Developing a new drug-what price do you charge the public

Assignment Help Business Economics

Reference no: EM13815486

Your firm spent $100 million developing a new drug. It has now been approved for sale, and each pill costs $1 to manufacture. Your market research suggests that the price elasticity of demand in the general public is -1.1.

What price do you charge the public? (Round to the nearest whole dollar)

Reference no: EM13815486

Questions Cloud

Hypothetical prices-quantities demanded of software product : The table below shows the hypothetical prices and quantities demanded of a software product. Assume that the fixed cost of setting up the production of software is $200 and the marginal cost is $5.

Tip of an endoscope could reduce risks : A proximity sensor attached to the tip of an endoscope could reduce risks during eye surgery by alerting the surgeon to the location of critical retinal tissue. A certain eye surgeon expects that by using this technology, he will avoid lawsuits of $0..

Using the midpoint formula for the elasticity of demand : Suppose you had an initial price of 32. Using the midpoint formula for the elasticity of demand, you determine that demand is unit elastic. What was the new price?

What would you charge private pay patients : Your dental clinic provides 3,000 exams for private pay patients and 1,000 exams for members of a union. Your fixed costs are $50,000 and your incremental cost is $40. If the union negotiated a fee of $45 instead, what would you charge private pay pa..

Developing a new drug-what price do you charge the public : Your firm spent $100 million developing a new drug. It has now been approved for sale, and each pill costs $1 to manufacture. Your market research suggests that the price elasticity of demand in the general public is -1.1. What price do you charge th..

What is the clinics profit-maximizing price : A clinic has incremental costs per case of $10 and overhead costs of $100,000. It faces a price elasticity of demand of -2. What is the clinic’s profit-maximizing price? (Round to the nearest whole dollar)

What is meant when the slope of a line is infinity : Explain what a slope of .5 would mean if you were measuring the relationship between consumer spending and income, where the dependent variable is consumer spending and the independent variable is income? Explain what is meant when the slope of a lin..

What are possible opportunity costs of opening arctic lands : What are possible opportunity costs of opening Arctic lands to private extraction of as-yet unavailable resource endowments?

Produce and sell the quantity and type of goods and service : The first paragraph gives two goals desired by society that the pure market economy is largely successful in reaching and explains why the market is able to attain these goals. produce and sell the quantity and type of goods and service that people w..

User Account

All Pages