below i will give some details and help me to draw an isoprofit curve. Thanks

Label the x-axis as "Quantity of Bedaquiline."
Label the y-axis as "Price of Bedaquiline."
Draw a downward-sloping isoprofit curve that starts at a profit-maximizing price of $46.
Now, let's explain what this diagram represents:

Profit (Producer Surplus):

Mark the point on the isoprofit curve where the price is $46. This is the initial profit-maximizing price for J&J.

Calculate the area above the supply curve and below the price of $46 up to the quantity produced. This area represents J&J's producer surplus at the original price of $46.

Markup:
3. Calculate the difference between the price ($46) and the cost of production ($5). This difference, $41, represents the markup that J&J was earning per unit of bedaquiline sold at the original price.

Consumer Surplus:
4. Now, mark the point on the isoprofit curve where the price is reduced to $8.

Calculate the area above the supply curve and below the price of $8 up to the quantity produced at this new price. This area represents the consumer surplus gained by consumers due to the price reduction.

Subtract the original consumer surplus (before the price reduction) from the new consumer surplus (after the price reduction). The difference between the two represents the change in consumer surplus.

Output:
7. The quantity of bedaquiline produced at the new price of $8 is determined by the intersection of the demand curve (you can assume a straight-line demand curve) and the new price level.

Now, let's explain the economic implications of this diagram:

Profit (Producer Surplus): J&J's producer surplus decreases as a result of the price reduction. This is because they are now selling the product at a lower price, and their profit per unit sold has decreased.

Markup: The markup, which was initially $41 per unit, has decreased significantly due to the price reduction.

Consumer Surplus: Consumer surplus has increased as a result of the price reduction. Consumers are now able to purchase bedaquiline at a lower price, leading to a larger consumer surplus.

Output: The quantity of bedaquiline produced has likely increased due to the lower price, making it more affordable for consumers, which also contributes to the increase in consumer surplus.

In summary, J&J's decision to reduce the price of bedaquiline from $46 to $8 per month has led to a decrease in producer surplus (profit), a significant decrease in markup, an increase in consumer surplus, and a likely increase in the quantity of bedaquiline produced. This decision reflects a trade-off between lower profits for the company and increased access and affordability for consumers, especially in the context of healthcare and drug pricing.

In a fake economy with small quantities, a corn farm has costfunction C = 10 + Q² and the farm can sell corn at themarket price of $8 per bushel. ('Q' is 'bushels of corn.') The firmmust sell an integer amount of bushels of corn. Calculateprofit-maximizing values of these: (Show your calculations toreceive credit for your answers)

a) quantity

b) total profits

c) average fixed cost

Concepts: Variable cost Fixed cost Total cost Average total cost Marginal cost

Total revenue Average revenue Marginal revenue Demand Curve

1. Mark Sampson, President of Sampson Switch Company must consider the pricing and production for the Ultra Switch Model B, one of the company’s top selling models. Switch production includes grinding and assembly of finished components. Marketing efforts consist primarily of print ads in trade publications. Last year the Model B produced a profit of $8,000.

Production facts. Sampson hires part time workers on an “as needed” basis to do the grinding task. On average, a grinder is paid $8.00 per hour and s/he is expected to produce 200 switch plates per each 8-hour day. Switch assemblers, also part-time workers, are paid $50 per day and they are expected to assemble 5 switches per hour. Each switch consists of two switch plates and assorted other components (the cost of the “other components” is $3.11 per switch).

Fixed Costs. Other costs include the year-long contract for the rental of the assembly line equipment ($1,000 per month).

Marketing facts. According to next year’s plan, Mark expects to place 10 black and white print ads (each $500) and two special feature, color ads (each $2,500) for the Model B. Salaries for the marketing sales force that are allocated to the Model B will total $18,000 next year.

1a. What is the cost to produce one switch? (i.e., the unit variable cost)?

1b. What and how much are the items composing the total “fixed” costs for next year?

1c. Graph the relationship between quantity produced (on the X-axis) and Total Cost (on the Y-axis).

1d. How much is the per-unit contribution if the product is priced at $15 a unit?

1e. What was the profit last year? What will be the change in profitability for the Model B if the product is priced at $15 per unit and 2,500 units are sold?

1f. What is the breakeven point if the product is priced at $15? How many must be sold next year in order to produce the same profit level as last year?

1g. Assume that Mark has $50,000 in equity invested in the Model B line. How many units must be sold in order to return 25% on his equity?

2. Answer qs 1a-g assuming that the selling price is reduced to $10 and demand increases by a factor of four.

3. After much investigation, the marketing research department tells Mark that they expect the “demand curve” to be. Compare the expected demand with the breakeven point for each price point. Knowing this information, what price should Mark charge in order to maximize profits on the Model B ?

4a. Create a graph showing “Quantity Demanded” on the X-axis and “Total Revenue $” on the Y-axis for each of the five price–quantity demanded points listed in q 3 above.

4b. Create a graph that superimposes the Total Revenue for the five points of the “Demand Curve” on the “Breakeven” Chart of the Model B (note the $$ Y -axis will represent Total Revenue for the Demand curve and will represent Total Cost for the Breakeven chart). { 01.81 gif k&b785 g pees ]

PROBLEM 5-19 Break-Even Analysis; Pricing [LO5-1, L05-4, L05-5] Minden Company introduced a new product last year for which it is trying to find an optimal sell- ing price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company's present selling price is $70 per unit, and variable expenses are $40 per unit. Fixed expenses are $540,000 per year. The present annual sales volume (at the $70 selling price) is 15,000 units. Required: 1. What is the present yearly net operating income or loss? 2. What is the present break-even point in unit sales and in dollar sales? 3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit? 4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)? Why is this break-even point different from the break-even point you computed in (2) above?