Choose a pharmaceutical product that is on the market today and answer the following by doing some research about the drug online. a. Explain what the drug is and what it is used for, and find an estimate of its price. Are there available substitutes for this drug for its primary uses? Look online to see if you can find estimates of the markup above costs on the pharmaceutical you have chosen. If you cannot find this, see if you can find information on the history of markups of that pharmaceutical (often times you may not know the markup above cost, but can see that the drug has seen some % markup in price since it was introduced this growth in the price will suffice as a proxy for markup above costs of production ). Based upon our discussion of the relative price setting power of different goods (use the Lermer Index], how does your understanding of the use of the good and the available substitutes explain the markups you observe on this drug? 4. Suppose you come home from having earmned your degree at CSUEB. Your parents own a local chain of fitness clubs that have a great reputation. Your father uses cost-plus pricing, and at the moment he is charging $200 for an annual membership, and is currently selling 200 memberships. Your parents are quite happy with their current markup above average costs You suspect that perhaps they could be doing better and be more profitable. As you just took ECOMN 380, you are well equipped to assess this! After consulting with the club's manager, you learn that the cost function for annual memberships is given by [Q)=1000+200+(1/20)Q*. Further, they tell you that the own price elasticity of demand is approximately -2.5 Are your parents choosing a membership price that is maximizing profit? If not, what would you suggest increase the price or reduce the price? Explzin. [Hint, relate back to Lecture 12). 5. You own afast food restaurant and must decide on a pricing strategy for burgers and fries. The market you serve contains equal numbers of 3 types of consumers called \"Average\