The diagram below shows the demand curve and marginal cost and marginal revenue curves for a new heart medication for which the pharmaceutical firm holds a 20-year patent on its production and sales.This protection gives the firm monopoly power for the 20 years of the patent.
FIGURE 10-6
-Refer to Figure 10-6.Assume this pharmaceutical firm has no fixed costs and is practicing perfect price discrimination among its buyers.At its profit-maximizing level of output,it will generate a total profit represented by
A) areas B + C + F + G + H + I.
B) areas C + F + H.
C) areas G + I.
D) the area below the demand curve minus the area below the MC curve,up to Q1.
E) It is not possible to determine with the information provided.
Correct Answer:
Verified
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