Find the profit-maximizing number of separate labs

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Reference no: EM13774431

Moli Labs Inc. is developing medical research on anti-memory loss pill. The lifetime value of the patent would be V = $840 (in millions). The company can invest in many separate identical labs. Each lab costs $21 million to operate, and each has a probability a = 0.7 of discovery. Find the profit-maximizing number of separate labs that Moli Labs Inc. should be investing in. Prove your result.

Reference no: EM13774431

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