A drug company produces a new drug to treat severe food allergies. The demand function for the drug is characterized by = 205 20, where Q measures the number of pills in the millions. The various costs of production are given by = 100 + 5 and = 5.

a. Suppose the government initially issues this firm a patent, making it a monopolist in the market. Draw the market demand curve, the marginal revenue curve, and the marginal cost curve. Make sure to label the axes, curves, and intercepts.

b. Find the profit-maximizing price and quantity of the drug and indicate them on your graph. How much would the drug company make in profits?

c. Suppose the government revokes the patent, and the firm must operate in a perfectly competitive market. Under this market structure, find the profit-maximizing price and quantity of the drug. How much would the drug company make in profits?