Please answer question 3

Imagine that Advil has developed a new type of medicine for treating headaches that is marginally (5%) more effective than its closest competitor (in terms of getting rid of headaches). The closest competitor to Advil is Tylenol which sells for $9.49 for 20 capsules. However, the Tylenol product has at least 10% more side-effects than the new Advil product. The manufacturing cost of these new medicines to Advil is $2.50 per 20 capsules. Advil has a policy of pricing new products such that its profit margin is at least 50% on the final price. Making the necessary assumptions (and stating them clearly), calculate the price for one 20 -capsule pack of Advil if they were to follow I) Cost-plus pricing 2) Competitor-based pricing 3) Value-based pricing 4)Taking everything into account, what price should Advil charge? Explain any factors you will consider when deciding on this final price recommendation