A pharmaceutical company Eureka Bio has discovered a Corona vaccine that can be produced at constant marginal cost of R10. The company has entered into offtake dosage agreements with Country A and B. Country A has a dosage demand of QA = 200 – PA, and Country B has dosage demand QB = 160 – PB. (c) If World Health Organization introduces a regulation on the price of dosages, calculate the price, profits and dosages that Eureka can charge. [5]

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A pharmaceutical company Eureka Bio has discovered a Corona vaccine
that can be produced at constant marginal cost of R10. The company has
entered into offtake dosage agreements with Country A and B. Country A
has a dosage demand of QA = 200 – PA, and Country B has dosage demand
QB = 160 – PB.

(c) If World Health Organization introduces a regulation on the price
of dosages, calculate the price, profits and dosages that Eureka can
charge. [5]

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