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 consumer surplus is
A)zero.
B)$24 million.
C)$64 million.
D)$44 million.
E)$32 million.

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 consumer surplus is
A)zero. 
B)$24 million. 
C)$64 million. 
D)$44 million. 
E)$32 million.

Quizplus · Accepted Answer

When a monopolist can perfectly price discriminate, it captures all consumer surplus as profit, leaving consumer surplus at zero.

Use the Figure Below to Answer the Following Questions