per unit, how many units do you have to sell for the vertical integration to yield the same profit as before?

Suppose Razor is the only pharmaceutical firm that sells a flu vaccine in an economy. It faces the following demand, marginal revenue, marginal cost and total cost functions. P = 70 – Q MR = 70 – 2Q MC = 10 + Q Demand: Marginal revenue: Marginal cost: Total cost: TC = 20 + 10Q + 2 Find the profit maximizing output and the price of the vaccine for the firm. Show your steps. а. b. Derive the average cost function. Show your workings. Use the result of part a and b, find the profit level of the firm. Show your workings. с. d. Suppose the government is considering a price ceiling 10 percent below the price derived in part a. I. Suggest one reason for the imposition of the price ceiling. II. i) With the price ceiling, what is the price for the vaccine? ii) Given the price in part i, how many vaccines will be purchased in the vaccine market? With the price ceiling, is there any shortage in the vaccine market? Explain your answer. iii)

What are transaction costs and why are they important to why firms exist? (hint: Coase theory)

Give examples, when the conditions of pure and perfect competition are relatively accomplished.

What are the key characteristics of perfect competition? How does monopoly differ from perfect competition? Which market achieves economic efficiency? Write an example of perfect competition, and one for monopoly.

Explain why so many entrepreneurs underprice their goods and services, especially when they first get into business.

Do you think firms really try to maximize profits? Do firms (especially small ones) know what prices they have to charge to maximize profits?

Evaluate the perfect competition market structure as a benchmark against which the functioning of all other types of market structures can be compared in terms of allocative efficiency and productive efficiency. Kindly provide a very detailed answer.

Many economists would argue that there is no such thing as perfect competition in the real world. What limitations to that theory would support their argument?

Distinguish among three types of imperfectly competitive industries and describe how imperfect competition differs from perfect competition.