how do I answer this?

[50 points] A pharmaceutical company offers a helpful, but not essential, patented drug for price 19 per prescription. It faces demand in a local market which can be expressed as Q=100p, where Q is the quantity of standard prescriptions sold. The rm's costs of providing the drug to this local market are captured by the function TC(Q) = 400 + 1062 + Q2. (e) [6 points] Suppose the rm's patent runs out, and the market shifts to perfect competition. Every rm has the same cost structure. In the long run, what will the price of a prescription for this drug be? And how much would the patent holder be willing to spend on intellectual property lawyers if it could retain its monopoly by doing so? (f) [14 points] Suppose instead that the patent holder retains its monopoly, and is able to eliminate the inefcient growth of variable costs from its total cost function. That is, its cost function is now simply TC(Q) = 400 + 10Q. Repeat the calculations above to nd the new monopolist prots, consumer surplus, deadweight loss, and surplus transfer from consumers to the rm. (You do not need to draw another graph, though it may help you answer the question.) Compare to the original case, and comment. How is the benet of a reduction in production costs distributed? (g) [6 points] For comparison: in a longrun perfectly competitive equilibrium, how much of the benet of a reduction in production costs would accrue to producers (as opposed to consumers)? Contrasting this with your answers from part (f), explain how this might be related to incentives to innovate among monopolists