A pharmaceutical company can produce each pill of a new drug at a constant marginal cost given by MC

A pharmaceutical company can produce each pill of a new drug at a constant marginal cost given by MC = 5. Note that since the marginal cost is constant, then the average cost of producing pills is also 5. Inverse demand for the pills is given by P = 25 – Q and the company’s marginal revenue curve is thus given by MR = 25 – 2Q.

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