Assume the demand for a new drug Alwayssmile is given for the first 2 years by Year 1: Q1-1600-2P1 Year 2: Q2=2Q1-4P2 Given the linear demand function, we know that the profit would be given by setting the Marginal revenue which has the same intercept as the demand and twice its slope = marginal cost Assume that the cost of producing Alwayssmile is approximately =0, Find the profit-maximizing price for the second year: P2

Assume the demand for a new drug Alwayssmile is given for the first 2 years by Year 1: Q1-1600-2P1 Year 2: Q2=2Q1-4P2 Given the linear demand function, we know that the profit would be given by setting the Marginal revenue which has the same intercept as the demand and twice its slope = marginal cost Assume that the cost of producing Alwayssmile is approximately =0, Find the profit-maximizing price for the second year: P2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Good afternoon, I am resending the full question. Please that is how the question was stated. Thanks in advance
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