Top Posters
Since Sunday
5
a
5
k
5
c
5
B
5
l
5
C
4
s
4
a
4
t
4
i
4
r
4
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
Nikolas Nikolas
wrote...
Go to Answer
Posts: 147
Rep: 0 0
A year ago

The diagram below shows the demand curve and marginal cost and marginal revenue curves for a new heart medication for which the pharmaceutical firm holds a 20-year patent on its production and sales. This protection gives the firm monopoly power for the 20 years of the patent.

Short description: A graph plots output against price. Long description: The horizontal axis representing output lists the following values from left to right: Q subscript 0 and Q subscript 1. The vertical axis representing the price lists the following values from top to bottom: P subscript 0, P subscript 1, and P subscript 2. The graph shows two lines and a curve. A dashed decreasing line represents MR. A decreasing line represents D. A concave up increasing curve represents MC. MR and MC intersect at (Q subscript 0, P subscript 0). MC and D intersect at (Q subscript 1, P subscript 1). A point is marked on D at (Q subscript 0, P subscript 0). Vertical and horizontal dotted lines are extended from the points to meet the axes. The regions to the left of MR, above P subscript 0, above P subscript 1, above P subscript 2, and below P subscript 2 are marked D, C, B, and A. The regions to the right of MR, above P subscript 0, above P subscript 1, above P subscript 2, and to the left of Q subscript 0 are marked E, F, and G. The regions to the left of Q subscript 0, within P subscript 0 and P subscript 1, and below P subscript 1 are marked H and I. The region to the right of Q subscript 0, below MR is marked K. The region to the right of MR, below MC, and to the left of Q subscript 1 is marked J.
FIGURE 10-9

Refer to Figure 10-9. Assume this pharmaceutical firm charges a single price for its drug. At its profit-maximizing level of output, consumer surplus is represented by



▸ areas C + D + E + F.

▸ areas H + I.

▸ areas D + E.

▸ There is no consumer surplus generated.

▸ It is not possible to determine with the information provided.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
Author:
Read 38 times
1 Reply
Replies
Answer verified by a subject expert
mr.pogimr.pogi
wrote...
#1
Posts: 131
Rep: 1 0
A year ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

Nikolas Author
wrote...

A year ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
sleinhi
wrote...

Yesterday
This site is awesome
Lourd Jenkins
wrote...

2 hours ago
Thanks
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1285 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 248
  
 449
  
 11445
Your Opinion
What's your favorite coffee beverage?
Votes: 274
Previous poll results: What percentage of nature vs. nurture dictates human intelligence?