This topic contains a solution. Click here to go to the answer

Author Question: Discontinuing a Generic Drug Prescott Pharmaceuticals makes a number of generic versions of drugs. ... (Read 138 times)

lracut11

  • Hero Member
  • *****
  • Posts: 536
Discontinuing a Generic Drug Prescott Pharmaceuticals makes a number of generic versions of drugs. When Cymbalta (Duloxetine) lost its patent, Prescott invested 500,000 to obtain FDA approval and 100,000 to certify one of its production lines for its production. Production of the drug will cost 2,000,000 . Marginal costs for the tablet are 0.10 and they sell for 0.40 per tablet. But many firms have entered and now make Duloxetine causing sales to fall off. Prescott anticipates that it could use this production line for other drugs losing patent protection shortly. If forecasted sales are 5 million tablets, what is the breakeven price? Should Prescott discontinue selling this product?

Question 2

If Tattling Tina tattles, what would Bratty Brenda's best response be
 a. Hit
 b. Not hit
  c. Run
 d. Hide



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

blakeserpa

  • Sr. Member
  • ****
  • Posts: 338
Answer to Question 1

The marginal cost of 0.10 can be avoided if the product were discontinued. The 500,000 spent to obtain FDA approval and the 100,000 spent to certify the production line are both sunk costs. But the 2 million spent on the production line itself can be avoided if it were used on a new product. So the average avoidable costs are 0.10 + 2 million / 5 million = 0.50 per tablet. This breakeven price exceeds the price of 0.40 so the product should be discontinued.

Answer to Question 2

b




lracut11

  • Member
  • Posts: 536
Reply 2 on: Jul 1, 2018
Gracias!


ashely1112

  • Member
  • Posts: 347
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

Did you know?

The top 10 most important tips that will help you grow old gracefully include (1) quit smoking, (2) keep your weight down, (3) take supplements, (4) skip a meal each day or fast 1 day per week, (5) get a pet, (6) get medical help for chronic pain, (7) walk regularly, (8) reduce arguments, (9) put live plants in your living space, and (10) do some weight training.

Did you know?

The newest statin drug, rosuvastatin, has been called a superstatin because it appears to reduce LDL cholesterol to a greater degree than the other approved statin drugs.

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

For a complete list of videos, visit our video library