(Figure: Pharmaceutical Pills Sales I) A pharmaceutical company sells its pills in foreign and domesticmarkets.Domestic MarketForeign MarketPrice ($) 20Price ($) 20181816161414121210108866MCMC442MR2DMRD002468101224681012QuantityQuantitySuppose the company must charge the same price in each market. The profit-maximizing price is$○ 12○ 8.677.67○ 7.00

Identify the intersection points of MR and MC in both markets.- In the Domestic Market, MR…

Answered: (Figure: Pharmaceutical Pills Sales I)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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urgent Question 3.Assume that a Swiss drug company holds the patent on a malaria medicine that has no closesubstitutes. If it charges the same price in every country where it sells this medicine, a price thatwill maximize its profits, that price will exceed what the vast majority of consumers in twentylower-income countries can afford to pay.a) Illustrate this situation using supply and demand curves.b) Use supply and demand curves to show how the Swiss company can sell at different prices ineach country and make a profit in each. Identify on the curves the profit the Swiss companymakes in a typical poorer country, and the profit it makes in a wealthier country.c) What condition is necessary for the Swiss company to be able to follow this strategy?
Problem 11. Maximization of a scarce resources. Marawi Corporation has 52,000 available machine hours and has a fixed overhead rate of P4 per hour. It is considering to produce two popular products with the following production and costs data: Costs if purchased from outside supplier Direct materials Direct labor Factory overhead at P9 per hour Annual demand in units Dragon Ball P 70 11 25 18 20,000 Samurai X P 105 Required: 1. Assuming that there is no market limitation, which product should Marawi Corporation produce? 2. Considering the market limits, how would Marawi Corporation use its limited machine hours to maximize profit? 3. Assuming that the unit direct materials cost of Samurai X decreases to P10 and considering the market limit, how would the limited machine hours be used to maximize profit? 22 38 27 15,000
At these levels of output the marginal revenue in the manufactured items market is and the marginal revenue in the semimanufactured raw materials market is . At these prices, the price elasticity of demand in the manufactured items market is and the the price elasticity of demand in the semimanufactured raw materials market is . (Hint: ED=PMR−P��=�MR−�) What are the total profits if the company is effectively able to charge different prices in the two markets? . If the company is required by law to charge the same per-ton rate to all users, the new profit-maximizing level of price and output are per ton and tons respectively. The total profits in this situation is .
J 7
A firm faces the demand schedule q = 400 - 2p - p². What price does it need to charge to sell 100 units? O £16.35 O £15.53 O £18.23 O None
None
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Successful product differentiation the price elasticity of demand and gives the firm ability to control its price. --- O increases; less O increases; more O reduces; less O reduces; more
Assuming the change in demand from D1 to D2 was caused by a decrease in consumer income from $30,000 to $10,000, what is the income elasticity of demand at price=$20 is , and this is a product? (a) 1/2 , inferior (b) -2, inferior (c) -1/2, inferior (d) 1, normal (e) 2, normal
Q7 Assume that Bandai Namco, the world's largest toy manufacturer, a monopolist, calculates that at its current toys output level, marginal revenue (MR) is $3.25 and marginal cost (MC) is $2.50. Bandai Namco could maximize profits or minimize losses by Multiple Choice decreasing price and leaving output unchanged. decreasing price and increasing output. increasing price and decreasing output. doing nothing. decreasing output and leaving price unchanged.
$15 $14 $13 $12 $11 $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 0 500 750 1,000 -MR=D ATC AVC 1,250 Referring to the graph above, the profit-maximizing price is Quantity
A company sells its product in foreign and domestic markets, as illustrated in the figures below: Domestic Market Foreign Market Price ($) 20 Price ($) 20 18 18 16 16 14 14 12 12 10 10 6. 6 MC MC 4 4 2- MR MR 10 12 4. 8. 10 12 Quantity Quantity Suppose the company uses third-degree price discrimination (or segmenting). What is the profit-maximising price in the domestic market? O a. $8.67 O b. $12.00 Oc. $7.67 O d. $7.00

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