Draw the demand marginal reveue and marginal cost curves, Ask an Expert

Economics

A pharmaceutical firm faces the following monthly demands in the U.S. and Mexican Markets for one of its patented drugs:
Qus= 300,000 - 5000Pus and Qx= 240,000- 8000Px

where quantities represent the number of prescriptions. Assume that the resale or arbitrage among markets is impossible and that marginal cost is constant at $2 per perscription in both markets. Monthly fixed costs are 1million in the Us and 500,000 in mexico.

Draw the demand, marginal reveue and marginal cost curves for each market. Estimate the profit maximizing prices and quantities graphically and/or determining the solutions algebraically. What are the firms total profits?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M969613

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