Economics

As the CEO of MediPharma, you are preparing to bunch a new allergy medication called Allerex. Your goal is to maximize the profits from this drug. Although there may be other allergy medications on the market, we will assume that the conceptual model of monopoly applies since there are no close substitutes for Allerex. After conducting a thorough market analysis, your team has determined the following demand schedule for Allerex: Price (5 ) Quantity (S per pill] (in millions of pills) 5.50 100 5.00 200 4.50 300 4.00 400 3.50 500 3.00 600 2.50 700 2.00 1.50 900 1.00 1000 0.50 1100 The fixed cost of producing Alleex 6 510 million, and the marginal cost of producing each pill & $1.00. a. What price per pill maximizes revenue for the MediPharma ? [4 points] b. Cakulate the marginal revenue at each price point. What is the marginal revenue at the reve nue - maximizing price from part (a]? [4 points] c. Without performaing any additional cak ulations, answer the following question: what price per pill maximizes profit for MediPharma. Explain your reasoning. [4 points] d. If the allergy medication market were perfectly competitive and all firms faced the same cost structure as MediPharma, what would be the equilibrium price in the market? Explain your reasoning. [4 points]