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Suppose that a pharmaceutical firm faces the following demand function for a vaccine in country A: P = 84 - 2Q. The marginal cost of
Suppose that a pharmaceutical firm faces the following demand function for a vaccine in country A: P = 84 - 2Q. The marginal cost of vaccine production is MC=$4. If the vaccine proves to be safe and effective, then the firm will receive patent protection for 20 years.
5 points Suppose that country B only offers patent protection for 5 years. What is the total profit that the firm makes if it has access to the markets in both countries A and B ? Type your answer... 5 points Assuming R&D costs of $20,000, will the firm choose to invest in drug development if it has access to the markets in both countries A and B ? No Yes 5 points Suppose that, in response to the global pandemic, the government of country A offers to cover $3,000 of the firm's total R&D costs. Will the firm choose to invest in drug development if it still has access to markets in both countries A and B ? No Yes 5 points Suppose that country B only offers patent protection for 5 years. What is the total profit that the firm makes if it has access to the markets in both countries A and B ? Type your answer... 5 points Assuming R&D costs of $20,000, will the firm choose to invest in drug development if it has access to the markets in both countries A and B ? No Yes 5 points Suppose that, in response to the global pandemic, the government of country A offers to cover $3,000 of the firm's total R&D costs. Will the firm choose to invest in drug development if it still has access to markets in both countries A and B ? No YesStep by Step Solution
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