Business, 14.06.2020 02:57 victoriay3
The biotech company Olderna has developed a new coronovirus vaccine it calls bug-b-gone or BBG. Unfortunately, it requires a fermentation process involving iguana eggs, making the marginal cost of the vaccine quite high. The cost function for doses of BBG is C(q) = 5,000 + 0.1q2 (where q is millions of doses). Demand for the vaccine in the US is projected to be D(p) = 90 - 5p, again in millions of doses. That means inverse demand, p(Q) = 18 - 0.2 Q. Part 1. Assume Oderna has a patent on the vaccine? How many (million) doses should it produce if it is maximizing profits from BBG? It should produce q = million doses. Part 2. What is the producer surplus of Olderna at the monopoly price and quantity? The PS will be million.
Answers: 2
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The biotech company Olderna has developed a new coronovirus vaccine it calls bug-b-gone or BBG. Unfo...
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