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Estimates of the marginal cost of Daraprim are $100 for a 100 pill bottle. If Turing...

Estimates of the marginal cost of Daraprim are $100 for a 100 pill bottle. If Turing Pharmaceuticals charged $75,000 per bottle, what is the elasticity of demand that Turing believe it faced? A spreadsheet to support answer if possible and simple analysis for answer.

  1. Suppose that the FDA does not regulate Imprimis and allows its drug to immediately compete with Daraprim. Under Cournot competition and the assumption that the competitor faces the same marginal cost of $100 / bottle, what is the profit maximizing market price of the drug?
  2. Should Martin Shkreli lower the price for Daraprim?

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Rahul Sunny answered 1 year ago
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