Historically produced and sold drugs for animals

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VetPharm has historically produced and sold drugs for animals; however, one of its products developed for animal use has recently been approved for a similar use in humans. Market research has revealed that at the current per dose price, the elasticity of demand on the part of animal owners is -2.0. The research also estimates that at this price the elasticity of demand for human use would be -.2. The current price is $5.00 per dose. If the MC of production is $1, what should the company do?

a. reduce animal price; reduce human price.

b. raise animal price; raise human price.

c. reduce animal price; raise human price.

d. raise animal price; reduce human price.

Reference no: EM13830819

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