Your pharmacy provides services to Medicare and PPO patients. You estimate a price elasticity of demand of
Question:
Your pharmacy provides services to Medicare and PPO patients. You estimate a price elasticity of demand of −2.2 for Medicare patients and −5.3 for PPO patients. Your marginal and average cost for dispensing a prescription is $2. What is the profit-maximizing dispensing fee for Medicare and PPO patients? Why might the price elasticities of demand differ?
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To determine the profitmaximizing dispensing fee for Medicare and PPO patients you can use the following formula Profit Price Cost Quantity In this ca...View the full answer
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