Question
I need help with the following questions Suppose a firm holds a patent that makes it the only seller of a type of Medicine. The
I need help with the following questions
Suppose a firm holds a patent that makes it the only seller of a type of Medicine. The firm charges all customers the same price per dose. Demand for Medicine is given by the equationWTP= $90 - $10Q. the firm incurs a fixed cost of $50 inventing the medicine and a unit cost of $20 per dose, so its cost is given the equationC(Q) = $50 + $20Q. The table below presents consumers' willingness-to-pay (WTP), the monopolist's total cost (C(Q)), average cost (AC), marginal cost (MC), total revenue (R), and marginal revenue (MR).
1- Given the firm's cost function and the demand for its product, what price will it charge for Medicine
2- How much profit will the firm make in equilibrium?
3-What is the consumer surplus in equilibrium
4- Is the equilibrium price and quantity efficient?
A-Yes, because it maximizes the firm's profits.
B-Yes, because every sale is voluntary.
C-No, because it does not maximize the consumer surplus.
D-No, because it does not maximize the total surplus.
E-No, because some people who want medicine do not get doses
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