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You own a pharmaceutical company that is specialized in the manufacture of medicine for smokers. You newly patented an innovative drug called Clealung, which drastically reduces the smokers' likelihood of lung cancer. You are the only maker of the medicine and there are no same products in the market. Your costs for producing Clealung can be explained by:
a) Write down your firm's profits in two ways: (i) as a function of the price per box and (ii) in terms of the quantity.
b) Maximize both profit functions, and illustrate that in both cases ??MR=MC at the optimum. In addition, compute the profit.
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Q. Explain the Shut down point? ShutdownPoint: With MR = MC, firm attains equilibrium at point E where it produces OM amount of the output. To produce this output, firm incur
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Using the CD data estimate a quadratic cost function. Test the hypothesis that there is diminishing marginal cost. Be sure to state what critical value you are using. Then, using t
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