Suppose that the FDA does not regulate Imprimis and allows its drug to immediately compete with...

Question

Question

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?
I've come up with the inverse demand function of p= -14.98 (10,000)+149900. Q1 and Q2 are given as 5,000 each, total 10,000. I'm struggling with how to determine the market price from this point.

Answer 1

Answer #1

Answer 2

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