Your company has developed a drug called Matrox that is an effective treatment for migraine headaches.You have just discovered that it can also be used for organ transplant patients to reduce the risk of organ rejection.The demand for migraine medications is considerably more elastic than the demand for drugs to reduce the risk of organ rejections.A study has indicated that the elasticity of demand for Matrox as a migraine medication is -4.0 but as a transplant drug it is -1.5.The current price of Matrox is $10 per dose; the marginal cost is $5 per dose.Should you use a price discrimination scheme for this product in these two markets? If so,how should you price Matrox in each market? If not,why not? Show all calculations.

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The Answer of Your company has developed a drug called Matrox that is an effective treatment for migraine headaches.You have just discovered that it can also be used for organ transplant patients to reduce the risk of organ rejection.The demand for migraine medications is considerably more elastic than the demand for drugs to reduce the risk of organ rejections.A study has indicated that the elasticity of demand for Matrox as a migraine medication is -4.0 but as a transplant drug it is -1.5.The current price of Matrox is $10 per dose; the marginal cost is $5 per dose.Should you use a price discrimination scheme for this product in these two markets? If so,how should you price Matrox in each market? If not,why not? Show all calculations.

Your Company Has Developed a Drug Called Matrox That Is