question archive The global pharmaceuticals giant, DrugCo, has had great success with Xamoff, and over-the counter medicine that reduces exam-related anxiety A patent currently protects Xamoff from competition, although rumors persist that similar products are in development Two years ago, DrugCo sold 25 million units for a price of $10 for a package of ten Last year it raised the price to $11, and sales fell to 22 million units a DrugCo is considering a further price increase to $12 Estimate the impact on the quantity sold Do you expect revenue to increase or decrease? b A financial analyst estimates the cost of production at $2 a package What price maximizes DrugCo’s profit? c When the patent expires in 2013, what do you expect to happen to demand? What about the elasticity?
The global pharmaceuticals giant, DrugCo, has had great success with Xamoff, and over-the counter medicine that reduces exam-related anxiety A patent currently protects Xamoff from competition, although rumors persist that similar products are in development Two years ago, DrugCo sold 25 million units for a price of $10 for a package of ten Last year it raised the price to $11, and sales fell to 22 million units a DrugCo is considering a further price increase to $12 Estimate the impact on the quantity sold Do you expect revenue to increase or decrease? b A financial analyst estimates the cost of production at $2 a package What price maximizes DrugCo’s profit? c When the patent expires in 2013, what do you expect to happen to demand? What about the elasticity?
Subject:ManagementPrice: Bought3
The global pharmaceuticals giant, DrugCo, has had great success with Xamoff, and over-the counter medicine that reduces exam-related anxiety A patent currently protects Xamoff from competition, although rumors persist that similar products are in development Two years ago, DrugCo sold 25 million units for a price of $10 for a package of ten Last year it raised the price to $11, and sales fell to 22 million units
a DrugCo is considering a further price increase to $12 Estimate the impact on the quantity sold Do you expect revenue to increase or decrease?
b A financial analyst estimates the cost of production at $2 a package What price maximizes DrugCo’s profit?
c When the patent expires in 2013, what do you expect to happen to demand? What about the elasticity?
