Price elasticity of demand in the general public

Assignment Help Business Management
Reference no: EM132035586

Your firm spent $100 million developing a new drug. It has now been approved for sale, and each pill costs $1 to manufacture. Your market research suggests that the price elasticity of demand in the general public is -1.1.

What price do you charge the public and what would happen to profits if you charged twice as much.What role does the $100 million in development costs play in your pricing decision.Medicaid agency has made a take it or leave it offer of $2 per pill. Do you accept?

Reference no: EM132035586

Questions Cloud

Health care services for insured individuals : What are the impact of copays and deductibles on demand for health care services for insured individuals.
Take a position between two views : Take a position between these two views: Product performance is the key to brand success versus Product aesthetics is the key to brand success.
Why the governor policy may not work : The newly elected governor of a small state in which the elderly comprise 26% of the total population-twice the national average-is eager to fulfill.
Lcc model that uses estimates of labour time : Understand how to create LCC model that uses estimates of labour time/cost, rates, material quantities and prices
Price elasticity of demand in the general public : Your market research suggests that the price elasticity of demand in the general public is -1.1.
Practicing product differentiation in market : Will sellers earn more total revenue and economic profit by practicing product differentiation in this market?
Neglect of effects on incentives to produce : Would it be more accurate to describe supply-siders as supply-and-demanders, who object to an overemphasis on aggregate demand
Solve the problem of quantity demanded during peak : The town council asks for your advice about the best way to solve the problem of quantity demanded during peak use hours. What advice would you give?
What is efficiency wage theory : Will employees shirk more or less and be more or less productive at their jobs when they are paid the above-market equilibrium wages by the firm?

Reviews

Write a Review

Business Management Questions & Answers

  Examine the three types of inpatient reimbursement systems

Examine the three types of inpatient or outpatient reimbursement systems? Evaluate the key advantages and disadvantages of each system from the point of view of a managed care plan and the hospital?

  What is the difference between classical probability

What is the difference between classical probability and empirical probability? Can you post an example for each? When will you say that two events are independ

  Find the probability the company will not lose money

Use an addition rule to find the probability the company will not lose money next quarter. b. Use the complement rule to find the probability it will not lose m

  Examine the painting before bidding

Both bidders can examine the painting before bidding. After examination, bidder 1 gets signal x1 and bidder 2 gets signal x2. Both x1 and x2 are independently drawn from a uniform distribution on [0; 1]. Let us assume that if a bidder is an expert..

  Aspect of human resource management or work

This assignment challenges you to study what faith and scripture say about some aspect of Human resource management or work.

  Maturity risk premium on all 5-year bonds

The real risk-free rate is r* = 2.5%, the default risk premium for Allen's bonds is DRP = 0.40%, the liquidity premium on Allen's bonds is LP = 2.2% versus zero on T-bonds, and the inflation premium (IP) is 1.5%. What is the maturity risk premium..

  What is present value of inventory

An investment will pay $1448 two years from now, 2726.00 four years from now and 3093.00 five years from now. If opportunity rate is 12.42% per year, what is present value of inventory?

  Brand name products do you think have failed

What famous brand name products do you think have - What famous "brand name" products do you think have failed? Why do you think this happened? What might have been done to correct the problem?

  Evaluate the role of ethical decision-making in business

Evaluate the role of ethical decision-making in business organizations. Analyze the impact of business ethics on stakeholder relationships.

  Diversifying to reduce volatility

Diversifying to reduce volatility is a good idea only if:

  Scope of production and operation management

1. Discuss the scope of production and operation management. 2. There are certain fundamental strategies that can be employed to improve productivity in manufacturing operations technology. Discuss

  He owns a priceless van gogh painting

Jimmy, an art dealer and merchant, is running out of funds. Luckily, he owns a priceless Van Gogh painting. He writes his friend Tommy. The letter says "Tommy you remember that Van Gogh painting you were interested in buying?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd