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A proposal has been advanced to limit advertising of pharmaceutical prices to prevent unfair pricing by national chains. You estimate that limits on price advertising will change the price elasticity of demand from -5.63 to -4.43. The marginal cost of a typical prescription is $40. A typical small pharmacy fills 25 prescriptions per day. The pharmacy is open 6 days per week and 52 weeks per year. A typical consumer fills 20 prescriptions per year.

From the pharmacists' perspective, what is the overall/ combined profit given the elasticity range?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91399809

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