Suppose that Pfizer develops a drug that cures an illness for which they are granted a patent for 20 years. The market demand curve faced by Pfizer for this drug is P = 40 - Q, and their cost to produce it is TC = 20Q and marginal cost is MC = 20. Q is in thousands of pills and P in dollars per pill.

a. Graph the demand curve, the marginal revenue curve, the average total cost curve and the marginal cost curve for this monopolist.

b. Find the profit maximizing quantity for Pfizer and the price it charges. What is Pfizer's profit?

c. Suppose that when the patent expires many firms start replicating the drug and selling it as a generic version, resembling a perfectly competitive market. What would be the equilibrium price and quantity?

d. What is the deadweight loss caused by the monopolist?