Background: There are 4-5 pharmaceutical companies (mainly from China, Germany, and the USA) that are researching...

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Economics

Background: There are 4-5 pharmaceutical companies (mainly fromChina, Germany, and the USA) that are researching a cure/vaccinefor corona â€“ hopefully, one of these companies will have a solutionfor the world shortlyâ€“ in the meantime, some governments areproposing for alternative treatments medicine like CHLOROQUINE(originally used to treat Malaria)
One company finally succeeds in producing the vaccine. Describeor explain in detail the following situations. ( 15 points) :
a) What is the new market structure this Pharma company belongsto now ? Why ?
b) List the 5 market structure characteristics for a Monopolyand explain the relation to the Corona vaccine .
c) How does Initial supply and demand look like for the newvaccine? (what about initial elasticity and price ?)
d) How happens in Long term for supply and demand if newpharmaceutical companies find a similar vaccine ? (what about longterm elasticity and price under the same conditions ?)
e) Describe what happens to Economic profits in the initialphase and the long term
f) Explain how the creative destruction concept applies (fromChloroquine to Corona vaccine) . Are there any benefits to everyonefrom having a Monopoly?

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3.6 Ratings (635 Votes)

a If one company success in finding the vaccine for Coronavirus then the market structure will be a monopoly MONO means single and POLY means seller and thus a single seller Monopoly is a market situation where there is a single firm selling the commodity and there is no close substitute of the commodity sold by the monopolist Since no other company has found the vaccine for CORONA the company selling vaccine practices monopoly B Characteristics Of Monopoly 1 SINGLE SELLER The first Main featuRE of monopoly is that there is only one seller of a commodity in the market with the reason that there is no distinction between the industry and the firm The firm itself is the industry and have full control over the supply of See Answer

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