Question
After several years of losses, Biopure engineers figure out a way to reduce the fixed cost to produce Oxyglobin from $15 million to $10 million.
After several years of losses, Biopure engineers figure out a way to reduce the fixed cost to produce Oxyglobin from $15 million to $10 million. If the price charged to veterinarians is $150 per unit, what is the breakeven market share under the following assumptions:(5 points)
Estimated demand for critical care transfused blood (non-critical care not targeted): 400,000 units
Variable production costs remain stable at $1.50 per unit
Sufficient in-house sales staff exists to distribute nationwide at a variable cost of 25% of thesalesprice
Veterinarians' willingness to trial: 95%
Pet owners' willingness to trial: 90%
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