If choosing to answer please acknowledge/ answer ALL parts or simply do not answer. I am extremely confused and would like to interpret these results. Thank you in advance!!
The following graph shows the demand, marginal revenue, and marginal cost curves for a single-price monopolist that produces a drug that helps
relieve arthritis pain.
Place the grey point(star symbol) in the appropriate location on the graph to indicate the monopoly outcome such that the dashed lines reveal the
profit-maximizing price and quantity of a single-price monopolist. Then, use the green rectangle (triangle symbols) to show the profits earned by the
monopolist
10
9
Monopoly Outcome
8
PRICE (Dollars per dose) 2 1
Monopoly Profits
MC=ATC
MR
Demand
0
1
2 3 4 5 6 7 8 QUANTITY (Millions of doses per year)
6
10
Suppose that should the patent on this particular drug expire, the market would become perfectly competitive,with new firms immediately entering
the market with essentially identical products
Further suppose that in this case the original firm will hire lobbyists and make donations to several key politicians to extend its patent for one more
year. The firm is prepared to spend up to$
million to extend its patent.
