Question

Mirk Labs is a British pharmaceutical company that currently enjoys a patent monopoly in Europe, Canada, and the U.S on Zatab, an allergy medication. The global demand for Zatob is Qd=15.0-0.2P where Qd is annual quantity demanded in millions of units of Zatab, and P is the wholesale price of Zatab per unit. A decade ago, Mirk Labs incurred $60 million in research and development costs for Zatab. Current production costs for Zatab are constant and equal to $5 per unit.

Answer 1

Qd=15.0 - 0.2P where Qd is annual quantity demanded in millions of units and P is wholesale price per Zatab unit. Current production costs for Zatab are constant and equal to $5 per unit. What wholesale price will Mirk labs set? How much Zatab will it produce and see annually How much annual profit does the firm make on Zatab?

Answer 2

Qd=15.0 - 0.2P where Qd is annual quantity demanded in millions of units and P is wholesale price per Zatab unit. Current production costs for Zatab are constant and equal to $5 per unit. What wholesale price will Mirk labs set? How much Zatab will it produce and see annually How much annual profit does the firm make on Zatab?