New answers tagged industrial-organisation
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The previous +1 answer gives the correct economic mechanism but let me give you some case specific answer here.
First of all there actually already is another drug that targets the same disease called Spinraza (see here) with cost of \$750,000 for the first year and then \$350,000 per year after that, so about \$4 million a decade. Assuming people with this ...
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In general, a monopolist prices such that marginal revenue equals marginal cost. The revenue is price times quantity. You can increase this revenue by increasing quantity and by increasing price, but you should know that each has an adverse effect on the other. Under monopoly typically less quantity is provided compared to other market forms in order to keep ...
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