Use the figure below to answer the following questions.

Figure 13.4.6
-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 per inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are shown in Figure 13.4.6. The patent gives Prime Pharmaceuticals a monopoly for its new inhaler. If Prime Pharmaceuticals can perfectly price discriminate, then it
A)sells 16 million inhalers.
B)charges a price of $2 for each inhaler it sells.
C)sells inhalers for $6 each.
D)makes zero economic profit.
E)Both A and B are correct.

Question

Use the figure below to answer the following questions.
  
Figure 13.4.6
-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 per inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are shown in Figure 13.4.6. The patent gives Prime Pharmaceuticals a monopoly for its new inhaler. If Prime Pharmaceuticals can perfectly price discriminate, then it
A)sells 16 million inhalers. 
B)charges a price of $2 for each inhaler it sells. 
C)sells inhalers for $6 each. 
D)makes zero economic profit. 
E)Both A and B are correct.

Quizplus · Accepted Answer

If Prime Pharmaceuticals can perfectly price discriminate, it will sell the quantity where marginal cost equals demand, which is 16 million inhalers, capturing all consumer surplus as profit.

Use the Figure Below to Answer the Following Questions