What are your optimal price also quantity

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Reference no: EM1322731

Q. If I can get help with a, I think I can figure out rest. Can someone help me get started? If not I would be willing to pay someone. Thanks.

You work for a drug company with a patent on a product called Hair Grow, the world's 1st drug that restores hair. You have been charged by the CEO to review the pricing also investment decisions for this product. The demand curve for Hair Grow has been estimated to be:
P = 52 - .00002Q

a. Your marginal cost to produce a unit of Hair Grow is $2. This marginal cost is the only cost associated with the product.
Illustrate what are the profit-maximizing price also quantity? Illustrate what is your profit?

b. Assume your production facility currently has a limit of 1,000,000 pills. Illustrate what are your optimal price also quantity?

c. Assume you can increase your production capacity to 2,000,000 pills within the next 2 years for an investment of $20,000,000. Should you undertake the investment? (Assume your borrowing costs are basically zero at the present time)

Reference no: EM1322731

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