Pharmalodiagnosticon, an up and coming pharmaceutical company, is thinking of introducing a new product, Sweet Relief, into the crowded OTC market for pain relievers. Its average retail price is set to be $10 for a bottle of 250 caplets. The retailer's margin is 30%. It will cost Pharmalodiagnosticon $1 a bottle for the key ingredient (aspirin), another $0.50 a bottle for the sugar coating, and another $0.50 for packaging.

Also, Pharmalodiagnosticon is almost completed pushing a second new drug through the FDA. The new pill, PainAway Chewables, is an all-natural mild pain reliever that is targeted at the thrifty consumer. The average retail price is expected to be around $6 for a pack of 250 chewables. The retailer's margin is 25%. It will cost Pharmalodiagnosticon a dollar per bottle for ingredients, $0.25 a pack for cushioning the pills with cotton and $0.25 for manufacturing the pack itself.