Optimal Pricing

After spending 10 years and $1.5billion, you finally have gotten Food and Drug Administration approval to sell your new patented wonder drug which reduces the ache and pain associated with aging joints. You will market his drug under the brand name Power Age. Market research indicates that the elasticity of demand of PowerAge is -1.25(at all points on the demand curve). You estimate the marginal cost of manufacturing and selling one dose of Ageless at $1.

1). What is the profit-maximizing price per dose of Power Age?

2). Would you expect the elasticity of demand you face for PowerAge to rise or fall when your patent expires?