What is the overall-combined profit given elasticity range

Assignment Help Business Economics

Reference no: EM13819164

A proposal has been advanced to limit advertising of pharmaceutical prices to prevent unfair pricing by national chains. You estimate that limits on price advertising will change the price elasticity of demand from -5.63 to -4.43. The marginal cost of a typical prescription is $40. A typical small pharmacy fills 25 prescriptions per day. The pharmacy is open 6 days per week and 52 weeks per year. A typical consumer fills 20 prescriptions per year.

From the pharmacists' perspective, what is the overall/ combined profit given the elasticity range?

From the pharmacists' perspective, what is the profit when the elasticity is -4.43?

Reference no: EM13819164

Questions Cloud

Increases in the money injection process : Other things remain the same, what would be the short-run effect of a permanent increase in the Japan’s money supply on the Yen/Dollar (¥/$) exchange rate? What is the impact on the Yen/Dollar (¥/$) exchange rate if real GNP in Japan, due to the stim..

Analyze from an anthropological perspective the victory : Analyze from an anthropological perspective the victory of Barack Obama as president of the U.S. in 2008. Does Obama’s victory indicate that the U.S. is no longer a racist country and that all ethnic groups in the society are treated equally? Is Obam..

Determine the breakeven output : Offshore Petroleum's fixed costs are $2,500,000 and its debt repayment requirements are $1,000,000. Selling price per barrel of oil is $18 and variable costs per barrel are $10. Determine the breakeven output (in dollars). Determine the number of bar..

Structuring a business as a partnership versus a corporation : Please identify and discuss advantages and disadvantages of structuring a business as a partnership versus a corporation. How have state LLC laws changed the effectiveness of a partnership from both a legal and taxation point of view?

What is the overall-combined profit given elasticity range : A proposal has been advanced to limit advertising of pharmaceutical prices to prevent unfair pricing by national chains. You estimate that limits on price advertising will change the price elasticity of demand from -5.63 to -4.43. From the pharmacis..

Values of exchange rate in the short and long run : R = 3% (annual domestic interest rate), R* = 5% (annual foreign interest rate) E = 2 (current spot rate; expressed as the price of pound in terms of us dollar) If the domestic money supply increases by 10% and drive the interest rate down by 1% in th..

What forces will bring the economy to long-run equilibrium : If an economy is in short-run equilibrium that is below potential, what forces will bring the economy to long-run equilibrium?

Process model to effectively market the product : In a well-researched essay, explain how the company has used the consumer decision process model to effectively market the product or service to you. This essay should detail the strategy based on the model, explain why the strategy was successful fo..

Some rivalry in many monopolistically competitive markets : In an oligopolistic market, firms pay close attention to the strategies of their rivals. In monopolistic competition, with a large number of sellers, it is assumed that there is not this kind of rivalry, or interdependence. Why is there probably some..

User Account

All Pages