[1] Monopoly
Suppose a pharmaceutical firm as a patented monopoly that has a plan to supply a
newly developed good q. This good requires R&D cost of k> 0 as a fixed cost but is
supplied at a constant marginal cost of c> 0. Once launched in a market, the market
demand is estimated as shown in (1) with a > 0. Then, answer the quizzes [1.1] and
[1.2].
4a
・(1)
3√9
[1.1] If the firm commercializes good q, how much would q and p be set? Select
numbers appropriate to the blanks (i) - (iv) in (2).
(iii)
(i) • a
C
and
P = (iv) . C (2)
(ii)
9 =
P =
[1.2] Show an interval of k satisfying that the firm creates this market. Select
numbers appropriate to the blanks (v) - (vii) in (3).
(vii)
(v) a
= (0,
(vi)
. C
]
(3)
