Many pharmaceutical products are used to treat multiple issues. One example of this is diphenhydramine. Formerly...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Many pharmaceutical products are used to treat multiple issues. One example of this is diphenhydramine. Formerly sold under patent as Benadryl, diphenhydramine is now an over-the- counter allergy relief medicine available in generic form. One of the side effects of diphenhydramine is drowsiness. More recently, it has been sold as a nighttime sleep aid (i.e. ZzzQuil). Walmart sells two generic versions of diphenhydramine; one is pink, sold as allergy relief medication, and one is blue, sold as a nighttime sleep aid. Walmart sells each version in a bottle of 100 pills with 25mg of diphenhydramine each. The allergy relief medication sells for $4 per bottle and the nighttime sleep aid sells for $4.98 even though these are chemically identical products. Suppose you are developing a pricing strategy for a firm in a similar situation to Walmart. You are selling a generic version of a medication which can be used to help keep someone awake but it also acts as a diuretic. Demand for this medicine from people who need to stay awake is Q = 8800 - 700P while demand for individuals who use the medicine as a diuretic is Q = 9300 - 1100P. The cost to your company of each bottle sold is $1.75; assume there are no fixed costs. The demand functions and the cost value are mothered halom Q= 8 800 700 P Q= Unit cost 9 300 $1.75 1 100 P a) Set up formulas to calculate quantity demanded, total revenue, total cost, profit from each kind of customer, and combined profit. Using solver, solve for the profit maximizing price for customers who use this medication to stay awake. Suppose you charge customers who use the medication as a diuretic the same price. How many bottles will you sell to each kind of customer? What is your combined profit? Stay Awake Price Quantity Demanded Total Revenue Total Cost Profit Diuretic Price Quantity Demanded Total Revenue Total Cost Profit Combined Profit b) Set up formulas to calculate quantity demanded, total revenue, total cost, profit from each kind of customer, and combined profit. Using solver, solve for the profit maximizing price for customers who use this medication as a diuretic. Suppose you charge customers who use the medication to stay awake the same price. How much will you charge per bottle? How many bottles will you sell to each kind of customer? What is your combined Diuretic Price Quantity Demanded Total Revenue Total Cost Profit Stay Awake Price Quantity Demanded Total Revenue Total Cost Profit Combined Profit from cach c) Set up formulas to calculate quantity demanded, total revenue, total cost, profit from each kind of customer, and combined profit. Suppose you charged customers differently based on their use of the medication. How much will you charge per bottle to each kind of customer? How many bottles will you sell to each kind of customer? What is your Stay Awake Price Quantity Demanded Total Revenue Total Cost Profit Diuretic Price Quantity Demanded Total Revenue Total Cost Profit Combined Profit d) Which plan would you pursue if you were making the decision and your goal is to maximize One would pursue Many pharmaceutical products are used to treat multiple issues. One example of this is diphenhydramine. Formerly sold under patent as Benadryl, diphenhydramine is now an over-the- counter allergy relief medicine available in generic form. One of the side effects of diphenhydramine is drowsiness. More recently, it has been sold as a nighttime sleep aid (i.e. ZzzQuil). Walmart sells two generic versions of diphenhydramine; one is pink, sold as allergy relief medication, and one is blue, sold as a nighttime sleep aid. Walmart sells each version in a bottle of 100 pills with 25mg of diphenhydramine each. The allergy relief medication sells for $4 per bottle and the nighttime sleep aid sells for $4.98 even though these are chemically identical products. Suppose you are developing a pricing strategy for a firm in a similar situation to Walmart. You are selling a generic version of a medication which can be used to help keep someone awake but it also acts as a diuretic. Demand for this medicine from people who need to stay awake is Q = 8800 - 700P while demand for individuals who use the medicine as a diuretic is Q = 9300 - 1100P. The cost to your company of each bottle sold is $1.75; assume there are no fixed costs. The demand functions and the cost value are mothered halom Q= 8 800 700 P Q= Unit cost 9 300 $1.75 1 100 P a) Set up formulas to calculate quantity demanded, total revenue, total cost, profit from each kind of customer, and combined profit. Using solver, solve for the profit maximizing price for customers who use this medication to stay awake. Suppose you charge customers who use the medication as a diuretic the same price. How many bottles will you sell to each kind of customer? What is your combined profit? Stay Awake Price Quantity Demanded Total Revenue Total Cost Profit Diuretic Price Quantity Demanded Total Revenue Total Cost Profit Combined Profit b) Set up formulas to calculate quantity demanded, total revenue, total cost, profit from each kind of customer, and combined profit. Using solver, solve for the profit maximizing price for customers who use this medication as a diuretic. Suppose you charge customers who use the medication to stay awake the same price. How much will you charge per bottle? How many bottles will you sell to each kind of customer? What is your combined Diuretic Price Quantity Demanded Total Revenue Total Cost Profit Stay Awake Price Quantity Demanded Total Revenue Total Cost Profit Combined Profit from cach c) Set up formulas to calculate quantity demanded, total revenue, total cost, profit from each kind of customer, and combined profit. Suppose you charged customers differently based on their use of the medication. How much will you charge per bottle to each kind of customer? How many bottles will you sell to each kind of customer? What is your Stay Awake Price Quantity Demanded Total Revenue Total Cost Profit Diuretic Price Quantity Demanded Total Revenue Total Cost Profit Combined Profit d) Which plan would you pursue if you were making the decision and your goal is to maximize One would pursue
Expert Answer:
Posted Date:
Students also viewed these economics questions
-
Image transcription text Module 5 Discussion A' Instructions: This discussion will be completed in two parts, and will give you an opportunity to reect upon this week's content and to interact with...
-
Can someone please summarize the case study below: if you know about the case IKEA Looks to Further Penetrate the U.S. Market 10 CASE Synopsis: IKEA is known around the world for its stylish,...
-
In Exercises, use the alternative form of the derivative to find the derivative at x = c (if it exists). f(x) = 1 x + 4' c = 3
-
Here are box plots, that show the relationship between the number of cylinders a car's engine has and the car's fuel economy. a) State the null and alternative hypotheses that you might consider for...
-
Puckett Products is planning for $5 million in capital expenditures next year. Puckett's target capital structure consists of 60% debt and 40% equity. If net income next year is $3 million and...
-
The various parts of the six component model are not isolated from one another, but rather cross-feed each other throughout the development of a successful entrepreneurial venture. Discuss the...
-
Carmen Camry operates a consulting firm called Help Today. On August 31, the companys records show the following accounts and amounts for the month of August. Use this information to prepare an...
-
You will reflect on your personal history with conflict. I am looking for: (a) your critical understanding of course material (COM 3350: Conflict Resolution); and (b) your ability to apply that...
-
There are many factors that affect the use of power and workers' response to it. What factors have been shown to affect the use of power and the nature of response to its use?Oftentimes, leaders do...
-
To what extent, if any, do the prospective financial gains of the banks' shareholders represent transfers of value from other claimholders, such as bank customers, employees, and communities in which...
-
Gravel is being dumped from a conveyor belt at a rate of 25 ft/min, and its coarseness is such that it forms a pile in the shape of a cone whose base diameter and height are always equal. How fast is...
-
You are told that A and B are two events, such that P(A) = 0.59, P(B) = 0.21, P(A and B) = 0.1 What is the value of P(B given A)? Give your answer to two decimal places. Do NOT give you answer as a...
-
Compare and contrast economic gains with changing conditions at the workplace, and assess whether working Americans saw their lot improve or worsen during the 1920s.
-
Find three identical food items made by different manufacturers (for example, cans of pears made by three different manufacturers) and do the following: Compare and contrast the nutritional...
-
Was Airbornes strategy of trying to diversify its product offering to include logistic services for clients wisely? Read the case study Airborne Express: Underdog and answer the question:
-
United Business Forms capital structure is as follows: Debt ............................................ 35% Preferred stock ........................... 15 Common equity .......................... 50...
-
Prove that van der Waals constants \((a, b)\) can be expressed in terms of critical temperature and pressure as follows: a = 27 R 2 T 2 c 64 P c b = R T c 8 P c a = 27 R 2 T c 2 64 P c b = R T c 8 P c
-
Show that where \[ \left(\frac{\partial U}{\partial V} ight)_{T}=\frac{T \beta}{\kappa}-P \] \(\beta=\) Coefficient of volume expansion \(\kappa=\) Isothermal compressibility.
-
Derive Maxwell's relations.
Study smarter with the SolutionInn App