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The Diagram Below Shows the Demand Curve and Marginal Cost

Question 95

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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 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 Q<sub>1</sub>. E) It is not possible to determine with the information provided. 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.

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