V.A producer faces the following demand schedule for the next medicine from one of its popular researchers: Quantity Demanded O boxes Price $100 90 100,000 80 200,000 70 300,000 60 400,000 50 500,000...

Extracted text: V.A producer faces the following demand schedule for the next medicine from one of its popular researchers: Quantity Demanded O boxes Price $100 90 100,000 80 200,000 70 300,000 60 400,000 50 500,000 40 600,000 30 700,000 20 800,000 10 900,000 1,000,000 The researcher is paid $2 million to development of new medicine, and the marginal cost of producing new medicine is a constant $10 per box. a. Compute total revenue, total cost, and profit at each quantity. What quantity would a profit maximizing producer choose? What price would it charge? b. Compute marginal revenue. (Recall that MR =A TR/A Q.) How does marginal revenue compare to the price? Explain. c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity do the marginal revenue and marginal-cost curves cross? What does this signify? d. In your graph, shade in the deadweight loss. Explain in words what this means. wwww www e. If the researcher were paid $3 million instead of $2 million, how would this affect the producer' s decision regarding what price to charge? Explain. f. Suppose the producer was not profit-maximizing but was concemed with maximizing economic efficiency. What price would it charge for the medicine? How much profit would it make at this price?