Answer Happy

5. A drug manufacturer faces the following demand curve for its patented drug: Quantity/year Price Marginal Revenue lo $20 1 $18 2 $16 3 $14 4 $12 5 $10 16 $8 7 $6 Suppose marginal cost is constant at $8 per unit. a. To maximize profits, the manufacturer will sell the quantity Explain. of the drug at price $ b. Suppose the drug cost $100 to develop. How many years would the patent have to last for the drug company to cover its development cost? c. When the patent expires, if competitive firms can enter the market and produce the drug at a cost of $8 per unit as well, what will happen to the price and quantity of the drug? Price: $ Quantity 6. In the economy of Freedonia in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. a. What were Freedonia's imports in 2015? b. What were their net exports? c. Suppose we define national saving S = GDP-C-G, that is, the portion of goods and services produced in a country that is not purchased by consumers or the government. What was Freedonia's national saving in 2015?