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sveticcg [70]
3 years ago
10

Recently, Pfizer and Allergan – the makers of Viagra and Botox, respectively – initiated a $160 billion merger. Pharmaceutical c

ompanies tend to spend a greater percentage of sales on R&D activities than other industries. The government encourages these R&D activities by granting companies patents for drugs approved by the Food and Drug Administration. For instance, Allergan spent large sums of money developing its popular wrinkle-removing neurotoxin, Botox, which is currently protected under a patent. Botox sells for about $15 per vial.Calculate the Lerner index if the marginal cost of producing Botox is $1.50 per vial.
Business
1 answer:
Lilit [14]3 years ago
3 0

Answer:

Lerner index for Botox = 0.9

Explanation:

The Lerner index measures market power in an industry. The formula for calculating the Lerner index is: L = (P - MC) / P

Lerner index for Botox = ($15 - $1.50) / $15 = 0.9

0.9 in the Lerner index means that a company has a very large market power. Under this situation, this is quite logical since Allergen has a monopoly on Botox, at least until the patent expires.

The Lerner index varies between 0 and 1, with 0 being a situation of perfect competition and 1 a monopolistic situation.

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Look at the sales prices change that is being suggested. In particular, Winetki talks about one of the product's prices as doubl
PilotLPTM [1.2K]

The calculation of a revised break-even point in units for the firm as a whole, using the weighted-average contribution margin approach is 1,155,556 units.

<h3>What is the weighted-average contribution margin?</h3>

The weighted-average contribution margin shows the average amount that a group of products or services contribute to meet the fixed costs.

The weighted-average contribution margin can be computed as Aggregate sales - Aggregate variable expenses) ÷ Number of units sold.

<h3>Data and Calculations:</h3>

Aggregate sales revenue = $1,800,000

Aggregate variable costs = $1,125,000

Aggregate contribution margin = $675,000 ($1,800,000 - $1,125,000)

Total units sold = 1,500,000

Total fixed costs = $520,000

Weighted average contribution margin = $0.45 ($675,000/1,500,000)

Break-even point in units = 1,155,556 units ($520,000/$0.45)

Thus, the calculation of a revised break-even point in units for the firm as a whole, using the weighted-average contribution margin approach is 1,155,556 units.

Learn more about break-even analysis at brainly.com/question/21137380

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4 0
1 year ago
A high growth software company will pay its first dividend of S0.30 next year. This dividend of . After that, the growth will $0
bija089 [108]

Answer:

The price of the stock today is $3.49. The right answer is A.

Explanation:

In order to calculate the price of the stock today, we need to calculate first Value after year 5 with the following formula:

Value after year 5=(D5*Growth Rate)/(Required return-Growth Rate)

To find D5 we need to make the following calculations:

IF D1=0.3 , hence D2=(0.3*1.1)=0.33 , D3=(0.33*1.1)=0.363 , D4=(0.363*1.1)=0.3993 and D5=(0.3993*1.1)=0.43923

Therefore, Value after year 5=(0.43923*1.05)/(0.15-0.05) =$4.611915

Therefore, now we can calculate the the price of the stock today with the following formula:

current price=Future dividends and value*Present value of discounting factor(rate%,time period)

=0.3/1.15+0.33/1.15^2+0.363/1.15^3+0.3993/1.15^4+0.43923/1.15^5+$4.611915/1.15^5

=$3.49

3 0
3 years ago
Fortunately, those who survive company layoffs rarely exhibit negative behaviors (such as decreased productivity or low morale).
Komok [63]

Answer:

The correct answer is letter "B": False.

Explanation:

Company layoffs not only represent a problem to the workers not working anymore for the firm but also to those who keep the job. Layoffs, in general, create uncertainty within a company because the remaining workers typically tend to believe sooner or later they will be laid off as well. Low esteem, engage with the company, and productivity is the result of this scenario.

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3 years ago
If a display rack was purchased for the store, which account would be increased
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Store equipment will increase
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2 years ago
Speech that is designed to move the listener to action or belief is _____. entertaining persuasive informative none of the above
horsena [70]

When the purpose of the communication is to the make the listener believes what the speaker says, the type of speech that would be most suitable is persuasive.

Thus, the answer to the question above is (B) persuasive, since the purpose of <em>entertaining speech</em> would be to create entertainment for the listeners while <em>informative speech’s</em> purpose would be to give information that the listeners do not yet know.

4 0
3 years ago
Read 2 more answers
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