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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: Private
Healthy Pharmaceutical Bhd. supplies medicines to private and government clinics. The company estimated the demand in each market to be as follows:
Government clinics:
Private clinics:
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
and
- If the company practices third-degree price discrimination, determine the price and quantity it should charge and supply in each market segment. [8 marks]
- 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]
- Determine the price that the firm should charge if the company is practising uniform pricing. [4 marks]
- Should the firm practise price discrimination? Justify your answer.
[7 marks]
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