A pharmaceutical company has been the sole producer of a patented drug. Upon the patent's expiration, several competing firms enter the market with generic versions. Assuming the original company wants to continue maximizing its profit, how will this new competition most likely affect its optimal price markup (the percentage difference between its price and marginal cost)?
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A pharmaceutical company has been the sole producer of a patented drug. Upon the patent's expiration, several competing firms enter the market with generic versions. Assuming the original company wants to continue maximizing its profit, how will this new competition most likely affect its optimal price markup (the percentage difference between its price and marginal cost)?
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