4. A pharmaceutical company has a patent on a new HIV drug. The demand curve for this drug in the US is given by the following: Demand: P = 20-(1/2)Q Marginal Cost = 10 a. Draw a diagram, and determine the monopoly price and quantity. Calculate the consumer and producer surplus. b. Protesters argue that this drug should be available to the general US population, and that the patent should be broken. Assume that if the patent is broken, generic firms will enter and the perfectly competitive outcome will result. If you're one of the protesters, use the change in consumer, producer, and social surplus to support your argument. c. Now argue in support of protecting intellectual property of the pharmaceutical company. Many developing countries in Africa are experiencing an AIDS epidemic. initially, the pharmaceutical companies and the US vigorously fought to protect the HIV patents. The next few parts will analyze the incentives for pharmaceutical companies faced under this situation. We will focus on the country of Swaziland, where roughly one in five individuals have HIV. Suppose the demand curve in Swaziland is given by the following: Demand: P: 12 - (1/2)Q d. Explain why the demand curve has this form relative to the US demand curve. [Hint: include income per capita in your answer] e. In Swaziland, calculate the monopoly profits if the patent is protected. f. Assume that because of the negative publicity and high litigation costs, the pharmaceutical company will lose 20 if it protects its patent. Determine if the drug company should protect or give up its patent in Africa. g. Finally, comment on whether the drug company wants to limit or encourage arbitrage across countries