Economics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 22

Suppose that an inventor discovers a new chemical compound that can change the color of people's eyes with no negative side effects. Since she holds a patent on this chemical, she has a monopoly over the sale of the new eye-color treatment. However, she's an inventor, not a businessperson. Explain to her how she should set the price for the eye-color treatment in order to maximize her profits.