The food and drug administration

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The Food and Drug Administration (FDA) just gave you the approval to sell your new patented drug which reduces the aches and pains associated with doing IO homework. You spent 10 years and $1.5 billion to market this drug under the brand name eazIO. Market research indicates that the price elasticity of demand for eazIO is constant along the relevant portion of the demand curve and is -1.15. You estimate the marginal cost of manufacturing and selling one additions does of eazIO is $2. (a) What is the profit-maximizing price per dose? (b) Would you expect the elasticity of demand you face for eazIO to rise or fall when your patent expires?

Reference no: EM13736851

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