Low marginal cost of producing the product

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You are manager of a small pharmaceutical company that received a patent on a drug three years ago. Despite strongest sales(125milion last year) and a low marginal cost of producing the product ($0.25 per pill) your company has yet to show a profit from a selling drug. This is in part due to fact that the company spent $1.2 billion developing the drug and obtaining FDA approval. An economist estimated that at the current price of $1.25 per pill, the own price elasticity of demand for the drug is -2.5.Based on his information, what can you do to boost profits? Explain

Reference no: EM13898374

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