1. Assume that a pharmaceutical company receives a patent for a drug that treats an infectious disease. Given the following information representing the demand and cost per unit per day: Quantity Pricel Total Marginal Total Total Marginal Average Average Profit per day Revenue Revenue Cost Variable Cost Variable Total Cost Cost Cost 0 S100 S10 90 20 80 28 3 70 35 4 60 43 5 50 53 6 40 65 . Complete the table above. Fill in the missing cells. 5. What are the fixed costs of production per day? In the short run, how many units of output should firm offer per day? What is the rule you used to determine the optimal production of units (profit-maximizing output) for the firm? 4. What is the profit-maximizing price to charge? What are the firm's profits (or losses) at the profit-maximizing price-output combination? Graph the firm's demand, marginal revenue, marginal cost, and average total cost functions. Clearly indicate the profit-maximizing output and price on your graph as well as the area that represents any profits (losses) the firm may experience. 2. From the article: "No one should worry about drug makers being able to make ends meet, but... Data released last month by drug makers themselves show that their ability to raise prices is waning." (WSJ, 2021) If the ability of drug companies to raise their prices is waning, does this mean the demand for their products has become more elastic or less elastic? Briefly explain your answer. 3. From the article: "...drug wholesalers that deliver medication to pharmacies, hospitals and other healthcare sites... get paid as a share of a drug's list price. As a result, a drug's sticker price doesn't typically reflect how much revenue the manufacturer gets when a prescription is filled." (WSJ, 2021) What is the difference between revenue and profit? If a firm's revenue decreases, does this mean its profit will also decrease? Briefly explain your answers. 1. Assume that a pharmaceutical company receives a patent for a drug that treats an infectious disease. Given the following information representing the demand and cost per unit per day: Quantity Pricel Total Marginal Total Total Marginal Average Average Profit per day Revenue Revenue Cost Variable Cost Variable Total Cost Cost Cost 0 S100 S10 90 20 80 28 3 70 35 4 60 43 5 50 53 6 40 65 . Complete the table above. Fill in the missing cells. 5. What are the fixed costs of production per day? In the short run, how many units of output should firm offer per day? What is the rule you used to determine the optimal production of units (profit-maximizing output) for the firm? 4. What is the profit-maximizing price to charge? What are the firm's profits (or losses) at the profit-maximizing price-output combination? Graph the firm's demand, marginal revenue, marginal cost, and average total cost functions. Clearly indicate the profit-maximizing output and price on your graph as well as the area that represents any profits (losses) the firm may experience. 2. From the article: "No one should worry about drug makers being able to make ends meet, but... Data released last month by drug makers themselves show that their ability to raise prices is waning." (WSJ, 2021) If the ability of drug companies to raise their prices is waning, does this mean the demand for their products has become more elastic or less elastic? Briefly explain your answer. 3. From the article: "...drug wholesalers that deliver medication to pharmacies, hospitals and other healthcare sites... get paid as a share of a drug's list price. As a result, a drug's sticker price doesn't typically reflect how much revenue the manufacturer gets when a prescription is filled." (WSJ, 2021) What is the difference between revenue and profit? If a firm's revenue decreases, does this mean its profit will also decrease? Briefly explain your answers
