Original manufacturer and new generic manufacturers

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When patent protection expires for a pharmaceutical company, it forces changes within the company to adjust its business strategies from a monopolist position to a position that is much more competitive. With that premise, answer the following questions:

• Do the variable costs and marginal costs vary much between these two market positions for a specific drug? Why or why not?

• What happens to the average total cost curve for the same (now generic) drug with regards to the original (prescription) manufacturer and the new generic manufacturers?

Reference no: EM131159883

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