Essay
As the result of a patent, only one company produces the drug Zoloft. This company was accused of abusing its market power: using its position as the sole producer of the drug to act as a monopolist and charge very high prices. A Competition Bureau economist estimates that the price elasticity of demand for Zoloft at its current price is - 0.5. Does this evidence support or contradict the contention that the firm is a profit- maximizing monopoly? Why or why not?
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