creating one of the world’s largest pharma companies.

Several years ago, Pfizer and Warner-Lambert agreed to a $90 billion merger, thus creating one of the world’s largest pharma companies. Pharmaceutical companies tend to spend a greater percentage of sales on R&D activities than other industries. The government encourages these R&D activities by granting companies patents for drugs approved by the FDA. For instance, Pfizer-Warner-Lambert spent large sums of money developing its popular drug, Lipitor, which is currently protected under a patent. Lipitor sells for $3 per pill.Calculate the Lerner index if the marginal cost of producing Lipitor is $0.30 per pill. SHOW ALL CALCULATIONS Does the Lerner index make sense in this situation. EXPLAIN