How is market size calculated according to the criteria provided?

Market size is calculated by determining the potential revenue from a product or service based on the number of customers and the average price they are willing to pay. The correct approach involves multiplying the average sale price of the product by the annual number of patients, which provides a clear estimate of the total market potential.

In the biomedical field, this calculation helps companies understand how much revenue they could potentially generate if they were to capture the entire market. Focusing specifically on annual patients ensures that the number reflects a consistent timeframe, which is essential for financial projections and strategic planning. This method is particularly relevant in healthcare, where patient populations may fluctuate and pricing can vary widely based on factors such as location and reimbursement rates.

Understanding market size in this way allows biomedical engineers and entrepreneurs to make informed decisions about product development, marketing strategies, and resource allocation based on the financial viability of their innovations in the U.S. healthcare system.