Question

1. You are the manager of a company that produces vaccines. Your company uses two inputs to produce vaccinations: physicians and laboratories. Suppose that each physician costs $500 per day and the daily cost for the laboratory is $1,500. In the short run, your company has 1 laboratory. The following table presents potential daily production levels with requisite input combinations.

Suppose the industry for vaccinations is a monopoly and that your firm is the only firm in the industry. Also, the demand schedule for vaccinations by consumers is given in table A below. To answer the questions below, first fill out tables A and B.

Table A: The Quantity of Vaccinations Demanded by Consumers

Price	Quantity Demanded	Total Revenue	Marginal Revenue
$30,000	0
$27,000	1
$24,000	2
$21,000	3
$18,000	4
$15,000	5
$12,000	6
$9,000	7
$6,000	8

Table B: Vaccination Function (time unit = 1 day) with Cost Structure

Physicians	Laboratories	Output (Q)	TC	TFC	MC	ATC
0	1	0	1500	1500
3	1	1	3000	1500
5	1	2	4000	1500
6	1	3	4500	1500
9	1	4	6000	1500
15	1	5	9000	1500
24	1	6	13500	1500
36	1	7	19500	1500
51	1	8	27000	1500

                                                    

Given that your company maximizes profit, provide answers to the following questions.

(a) Fill out tables A and B.

(b) Determine the number of output (Q), the number of physicians and the price for vaccine. Show your work/or explain your (economic) logic behind your answer!

(c) What would be the maximized profit? Show your work/or explain your (economic) logic behind your answer!

Answer 1