Pfizer own the copyright for “Pfizer COVID Vaccine (PCV)”. The total cost of producing Q units of PCV is TC=100+50Q+0.5Q2: . The annual demand for PCV is P=300-0.2Q. Q is the number of units of PCV. The annual interest rate facing all agents in the economy is 8.75%.  a.      How many units of PCV should Pfizer produce? What price should Pfizer charge for one unit of PCV? Clearly explain your reasoning. b.     What is TR from PCV to Pfizer? What are Pfizer’s annual profits from PCV? c.      Suppose the Pfizer copyright of PCV was due to expire by 2021. Describe the new market structure that would occur if PCV entered the public domain, meaning anybody could use PCV. What would be the new price of one unit of PCV? How many units of PCV would be sold by the COVID vaccine industry?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

  Pfizer own the copyright for “Pfizer COVID Vaccine (PCV)”. The total cost of producing Q units of PCV is TC=100+50Q+0.5Q2: . The annual demand for PCV is P=300-0.2Q. Q is the number of units of PCV. The annual interest rate facing all agents in the economy is 8.75%. 

a.      How many units of PCV should Pfizer produce? What price should Pfizer charge for one unit of PCV? Clearly explain your reasoning.

b.     What is TR from PCV to Pfizer? What are Pfizer’s annual profits from PCV?

c.      Suppose the Pfizer copyright of PCV was due to expire by 2021. Describe the new market structure that would occur if PCV entered the public domain, meaning anybody could use PCV. What would be the new price of one unit of PCV? How many units of PCV would be sold by the COVID vaccine industry?

Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Health Insurance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education