Does the Managerial Solution change if the entry of the generic causes a parallel shift to the left of the patent monopoly’s linear demand curve?
Answer to relevant QuestionsProposals to reduce patent length for drugs are sometimes made, but some critics argue that such a change would result in even higher prices during the patent period as companies would need to recover drug development costs ...Disneyland price discriminates by charging lower entry fees for children than adults and for local residents than for other visitors. Why does it not have a resale problem?Does a monopoly’s ability to price discriminate between two groups of consumers depend on its marginal cost curve? Why or why not? Are all the (identical) customers of the nonlinear price- discriminating monopoly in panel a of figure worse off than they would be if the firm set a single (uniform) price (panel b)? What if the consumers were not identical?A monopoly sells two products, of which any given consumer wants to buy only one (and places no value on the other good). If the monopoly can prevent resale, can it increase its profit by bundling the goods, forcing ...
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