On the graph demonstrate the area which represents net loss

Reference no: EM13390847

Assume the graph below represents the market demand for a patented prescription drug together with the long run marginal cost and average cost functions for producing the drug. (note: the diagram assumes that at output levels over 50 million AFC ~ 0, and MC is constant so that ATC = AVC =MC = $20)

A) Draw the marginal revenue function for this firm.

B) What is the profit maximizing price for this firm?

C) On the graph show the area which represents the net loss to society resulting from the monopoly power conferred by the patent.

D) What do you predict will happen to the structure of competition and to the price in this market when the patent expires ? (Hint: use the concept of "Minimum efficient scale " of production in your answer.)

Reference no: EM13390847

Questions Cloud

Explain three major cross-cultural differences which would : businesses large and small now compete in a truly global economy. to be successful in another country it is essential

Write down some of the constraints on the strategic : 1. what are some of the constraints on the strategic management of non-profits and how can they be addressed?2. are

Using your own present or previous place of work as an : using your own present or previous place of work as an example propose a method for mitigating the problem of separate

Lets use excel for creating software for a company to use : lets use excel for creating software for a company to use frequently for break-even analysis budgeting and variance

On the graph demonstrate the area which represents net loss : assume the graph below represents the market demand for a patented prescription drug together with the long run

Would you consider the approach incompatible with long run : jet blue corporation continuously offers fare discounts to attract customers awareness about the company increase

Submit a 2 to 4 page apa-style paper which summarizes each : submit a 2 to 4 page apa-style paper that summarizes each phase of the project lifecycle and analyzes how each phase

Find out the annual cost of ordering and carrying the : a grocery store carries a particular brand of coffee that has the following characteristicssales 8 cases per

Thereby allowed them all to drastically decrease their : verizon wireless atampt t-mobiles and sprint together provide over 90 cellphone services in the us wireless voice amp

User Account

All Pages