SEMESTER FALL 2020

ECONOMICS (ECO401)
ASSIGNMENT II

Marks: 10
Due date: 29th Jan 2021

The Case:

COVID-19 Vaccine was the great challenge for the pharmaceutical companies. There are different
companies who are competing to produce COVID-19 Vaccine like Astra Zeneca, Pfizer, Moderna,
Novavax, Sino Vac, Curevac, and Johnson & Johnson etc. Pfizer Inc. is one of the world’s largest
Pharmaceutical companies. It is largest United States corporations by total revenue. In May 2020,
Pfizer began testing four different COVID-19 vaccine variations. It is also preparing Vaccine
tozinameran with the help of German biotechnology company BioNTech. This company is
expecting to produce hundreds of millions of doses in 2021. Suppose the total revenue (TR) and
total cost (TC) functions of this company are:

𝑻𝑹 = 𝟏𝟓𝟎𝑸 − 𝟒𝑸𝟐
𝑻𝑪 = 𝟒𝟎 + 𝟏𝟎𝑸 + 𝟑𝑸𝟐
Requirements:

a) Calculate the profit maximizing level of output for a price making firm.
b) Calculate the amount of profit earned by the firm at profit maximizing level of output
calculated in Part 1.
c) Mathematically prove the slope of MR is twice the slope of AR.

(Marks: a: 4, b: 3, c: 3)

IMPORTANT NOTE:
24 hours extra / grace period after the due date usually available to overcome uploading
difficulties. This extra time should only be used to meet the emergencies and above mentioned
due dates should always be treated as final to avoid any inconvenience
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
 Make sure to upload the solution file before the due date on VULMS.

 Any submission made via email after the due date will not be accepted.
FORMATTING GUIDELINES:
 Use the font style “Times New Roman” or “Arial” and font size “12”.

 It is advised to compose your document in MS-Word format.

 You may also compose your assignment in Open Office format.

 Use black and blue font colors only.

RULES FOR MARKING

Please note that your assignment will not be marked if,

at other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.

Note related to load shedding: Please be proactive

Dear students:
As you know that semester activities have started and load shedding problem is also prevailing in
our country. Keeping in view the fact, you all are advised to post your activities as early as
possible without waiting for the due date. For your convenience; activity schedule has already
been uploaded on VULMS for the current semester, therefore no excuse will be entertained after
due date of assignments, quizzes or GDBs.
Best of Luck!