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The Diagram Below Shows the Demand Curve and Marginal Cost

Question 46

Multiple Choice

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. 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 is practicing perfect price discrimination among its buyers.At its profit-maximizing level of output,it will generate a deadweight loss to society represented by A) areas H + I. B) areas H + I + J + K. C) areas I + J + K. D) There is no deadweight loss generated. E) It is not possible to determine with the information provided. FIGURE 10-6
-Refer to Figure 10-6.Assume this pharmaceutical firm is practicing perfect price discrimination among its buyers.At its profit-maximizing level of output,it will generate a deadweight loss to society represented by


A) areas H + I.
B) areas H + I + J + K.
C) areas I + J + K.
D) There is no deadweight loss generated.
E) It is not possible to determine with the information provided.

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