CASE STUDY : ELI LILLY POSES A THREAT OF POTENTIAL ENTRY FOR ASTRAZENECA In 2020, AstraZeneca's cancer treatment Nolvadex become the first drug ever approved for reducing the risk of breast cancer in currently healthy women. Eli Lilly markets a pharmaceutical product, Evista, long approved by the FDA for the treatment of osteoporosis. Preliminary tests have suggested a therapeutic potential for Evista in the prevention of breast cancer. Lilly promptly released an Evista study in which the incidence of developing cancer over a three-year period was reduced 55 per cent in 10,575 women with high-risk factors for developing breast cancer. AstraZeneca sued to stop and undoubtedly slowed Lilly's marketing efforts, but the real barrier to entry would come if the FDA denies the use of Evista for breast cancer treatment. Without such a denial, AstraZeneca's Nolvadex faces a formidable direct competitor from a preexisting supplier in an adjacent relevant market. Source: "Zeneca Sues Eli Lilly Over Evista Promotion", Wall Street Journal (February 16, 2022) Answer the following questions based on case study above: a)How does the price faced by a profit-maximizing competitive firm compare to its marginal cost?. Explain (10 marks) When does a profit-maximizing competitive firm decide to shut down?. Justify you answer with a suitable diagram.