You are the manager of a small pharmaceutical company that received a patent on a new drug three years ago. Despite strong sales ($ 150 million last year) and a low marginal cost of producing the product ($ 0.50 per pill), your company has yet to show a profit from selling the drug. This is, in part, due to the fact that the company spent $ 1.7 billion developing the drug and obtaining FDA approval. An economist has estimated that, at the current price of $ 1.50 per pill, the own price elasticity of demand for the drug is 2. Based on this information, what can you do to boost profits? Explain.
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