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Pfizer is assessing the costs of producing a new pharmaceutical drug. The fixed production costs are $50,000,000, and the variable costs are $5 per unit.

Pfizer is assessing the costs of producing a new pharmaceutical drug. The fixed production costs are $50,000,000, and the variable costs are $5 per unit. Pfizer expects to produce 10,000,000 units in the first year. Additionally, regulatory approval costs are estimated to be $20,000,000.

Requirements:

  1. Calculate the total production and regulatory approval costs.
  2. Determine the cost per unit.
  3. Analyze the impact of producing an additional 2,000,000 units on total and per-unit costs.
  4. Discuss the importance of managing regulatory approval costs.
  5. Recommend strategies for optimizing pharmaceutical production.

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