Solution-Price charged and quantity sold in canada

Price charged and quantity sold in canada

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Reference no: EM133123868

A pharmaceutical company sells a drug in the United States and in Canada. The marginal cost of producing the drug is the same in both markets is $2.00

Demand and marginal revenue in the United States are respectively P_us = 12-0.1Q_usand MR_us= 12-0.2Q_US

Demand in Canada is P_can= 6-0.05Q_can and MR_can=6-0.1Q_can

Assume that average variable cost (AVC) = marginal cost = $2.00 and that the production for both markets is from one facility with fixed costs of $100.00

1. The price charged and quantity sold in the United States are?

2. The price charged and quantity sold in Canada are?

3. Assume that average variable cost (AVC) = marginal cost = $2.00 and that there are two production facilities with identical costs and that fixed costs are $50.00 in each facility. What is the combined profits in both markets?

Reference no: EM133123868

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Price charged and quantity sold in canada

Reference no: EM133123868

Reference no: EM133123868

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