Suppose there are five drug companies all working on finding a cure for cancer. Each one has

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Suppose there are five drug companies all working on finding a cure for cancer. Each one has a one-in-five chance of finding the cure and being able to patent it. It costs $100 billion for each company to do cancer research. Assume firms will do the research if expected profits

(the probability of getting the cure times the profits from the cure)

cover research cost. What must the profits from the cure be? What would happen if drug companies were forced to sell drugs at cost, including their research cost?

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