(Answered) Suppose that a pharmaceutical company has a monopoly over

Management Studies

Suppose that a pharmaceutical company has a monopoly over their drug in both Brazil and in the U.S. Find the profit maximizing quantity and price that it would charge if it can imperfectly price discriminate (by setting a different price in each country). Suppose also that each country prohibits the drug from being imported from the other country. The monopolist faces the following cost function C(Q)=C(Q_1+Q_2) = 2Q^2 + 50000 In Brazil (market 1), the demand for this drug is given by Q_D1=1000-2P_1 In the U.S. (market 2), the demand for this drug is given by Q_D2=600-P_2

What quantity does the firm sell in each market? What is the total quantity sold?

What price does the monopolist charge in each market? (8 points) What is the total profit for the monopolist?

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