Question

Demand function for Zatab:

Qd = 15.0 - 0.2P
Q = annual quantity demanded
P = wholesale price of one Zatab unit

Production cost per unit: $5
Mirk Lab incurred a $60 million R&D cost a decade ago

1: What wholesale price will Mirk Labs set?

2: How much Zatab will it produce and
sell annually?

3: How much annual profit does the firm make on Zatab?

Answer 1

Demand function for Zatab:
Qd = 15.0 - 0.2P
Production cost per unit: $5
Mirk Labs incurred a $60 million R&D cost

1) What wholesale price will Mirk Labs set?
2) How much Zatab will it produce and sell annually?
3) How much annual profit does the firm make on Zatab?

Answer 2

what in the world is Zatab? And, what is your question?

Answer 3

Zatab is an allergy medication made by MIRK Labs [British pharmaceutical] that enjoys a patent monopoly in Europe, Canada, and USA.