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-Prime Pharmaceuticals Has Developed a New Asthma Medicine, for Which

Question 343

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-Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if there is competitive rent seeking, then Prime Pharmaceuticals' producer surplus is equal to A) $32 million. B) $48 million. C) zero. D) $64 million.
-Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if there is competitive rent seeking, then Prime Pharmaceuticals' producer surplus is equal to


A) $32 million.
B) $48 million.
C) zero.
D) $64 million.

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