2. A patent on a drug is about to expire. There are no economies or diseconomies of scale When producing this drug. Thus, the monopoly currently producing the drug has a constant marginal cost, MC", = 4. The market demand for the product is given by Q = 200 - 2P. a. Find the optimal price and quantity under monopoly. b. The monopolist has xed costs of F C : 1, 000. Find the monopolist's prot. (Hint: When marginal cost is constant, average variable cost is constant and equal to marginal cost, i.e., A VC : MC) c. Find the value of our best estimate for consumer surplus under monopoly. d. Find total welfare under monopoly. Once the patent expires, the market will become competitive. Each individual rm will produce Where MC = minimum AC = 4. Thus, this is a constant cost competitive industry, with market supply given by PC = 4. e. Find the equilibrium price and quantity under competition. f. Find total welfare under competition. g. In this market, which group receives all of the gains from trade? h. What is the dead weight welfare loss caused by monopoly