need answers by 5pm. thanks 5%ZFr.-@e c oli Secure l https/ ion.com/wow/connect.

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need answers by 5pm. thanks

5%ZFr.-@e c oli Secure l https/ ion.com/wow/connect.htm?returnUrtttps%3A%2Fw Apps For quick access place your bookmarks here on the bookmarks bar, Import bookmarks now Help Save&Exit Submit Homework 1t 2 of 2, Chapter 7 Recently, Pfizer and Allergan- the makers of Viagra and Botox, respectively- R&D activities by granting companies patents for drugs approved by the Food and Drug Administration. For instance. Allergan spert initiated a $160 billion merger, Pharmaceutical sales on R&D activities than other industries. The government encourages these ich is currently protected under a patent. Botox 10 points large sums of money developing its popular wrinkle-removing neurotoxin. Botox, w sells for about $15 per vial Calculate the Lermer index if the marginal cost of producing Botox is $150 per vial elook Does the L erner index make sense in thes situation? References , No, it is not possble to have a Lerner index this high Yes, Allergan has a patent-protected monopoly No, a Lerner index this high is not consistent with profit maximization

Explanation / Answer

Lerner's index = (P-MC)/P = (15-1.5)/15 = 0.9

Yes, Allergan has a patent protected monopoly.

Lerner's index measures monopoly power and Allergan does have monopoly power. So it does make sense to calculate Lerner's index.

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