In scenario #1, there is no financial incentive (read: livable wages for researchers, manufacturers, etc.) to create medicine because your profit is $0, and we have 1000 deaths because nobody makes the medicine.
In theory if the amortized cost of a dose (including R&D salaries, equipment, drug trials, and manufacturing) is truly $1 per dose for such a tiny addressable market, competitors will pop up all over the place and undercut you on price.
From a game theory perspective, a firm choosing option #3 would lose ALL of their market share to another firm choosing option #2, and would have profit of -$1000 because they are unable to sell any of their doses.
In theory if the amortized cost of a dose (including R&D salaries, equipment, drug trials, and manufacturing) is truly $1 per dose for such a tiny addressable market, competitors will pop up all over the place and undercut you on price.
From a game theory perspective, a firm choosing option #3 would lose ALL of their market share to another firm choosing option #2, and would have profit of -$1000 because they are unable to sell any of their doses.