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Healthy Pharmaceutical Bhd. supplies medicines to private and government clinics. The company estimated the demand in each market to be as follows: Government clinics: PG
Healthy Pharmaceutical Bhd. supplies medicines to private and government clinics. The company estimated the demand in each market to be as follows: Government clinics: PG = 200 0.8QG Private clinics: PP = 220 ZQP The price is RM per bottle (round up to 2 decimal points only) and the quantity is in bottles. The total cost of producing the medicine is TC = 2500 + 40Q and Q=QG+QP Page 3 of 5 i. If the company practices third-degree price discrimination, determine the price and quantity it should charge and supply in each market segment. [8 marks] ii. Find the price elasticity of demand at the equilibrium price of each market and draw your conclusion (round up to 1 decimal point only). [6 marks] iii. Determine the price that the rm should charge if the company is practising uniform pricing. [4 marks] iv. Should the rm practise price discrimination? Justify your answer. [7 marks]
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