Question 16
After spending 10 years and $1.5 billion, you have finally gotten Food and Drug Administration (FDA) approval to sell your new patented wonder drug, which reduces the aches and pains associated with aging joints. You will market this drug under the brand name of Ageless. Market research indicates that the elasticity of demand for Ageless is 1.25 (at all points on the demand curve). You estimate the marginal cost of manufacturing and selling one additional dose of Ageless is $1.
Based on the above data, answer the given subquestions.
What is the profit-maximizing price per dose of Ageless (in $)?________________________