1.Pfizer is a profit-maximizing monopolist. It sells a patented vaccine for COVID-19 and earns economic profits.

a)Draw a correctly labeled graph that shows output (Qm) and price (Pm) of the vaccine and area of economic profits (Pm).

b)Assume that Pfizer hires its production worker in a perfectly competitive labour market at the wage of $20 per hour. Please state the marginal conditions for hiring the profit-maximizing amount of labour.

c)Continue from b), draw a correctly labeled diagram that shows the labour supply and demand curves for Pfizer and indicate the profit-maximizing quantity of labour. (Hint: you may want to refer to Chapter 11 notes.)

d)Suppose that the market wage rate falls to $15 per hour. Show on your diagram in part c) how each of the following would be affected.

i)The supply of labour to Pfizer.

ii)The amount of labour Pfizer would hire.

e)Given the lower wage rate in part d), indicate how TFC, MC and price of the vaccine would change.