What is the value of deadweight loss

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i. Estimates of the marginal cost of Daraprim are $100 for a 100 pill bottle. If Turin Pharmaceuticals charges $75,000 per bottle, what is the elasticity of demand that Turing believed it face? What is the associated Learner index for Daraprim?

ii. Assumed that Turin Pharmaceuticals based its pricing decision $75,000/bottle for 5,000 bottle on an inverse demand curve estimate of P=14.98Q + 149 900. Verify the inverse demand curve estimate base on Turin's pricing decision. Verify that P=$75,000 is the profit maximizing price.

iii. Draw and label a graph of deadweight loss associated with the monopoly price charged by Daraprim. What is the value of deadweight loss?

Reference no: EM132484530

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