Watch the following PBS Newshour video that details some of the issues surrounding antibiotic drug development and production:

http://www.pbs.org/newshour/bb/financial-barrier-developing-antibiotics-no-big-payday-drug-companies/

1.Based on the information presented in the news piece where is the price (P) relative to average total costs (ATC) in the new antibiotic drug market? Why do you think P is either above, below, or at ATC?

2. What is the logic for allowing pharmaceutical companies to be granted a patent or a government sanctioned monopoly for a certain amount of time?

3. Do you think that government intervention in this market necessary? If you either believe or don't believe government intervention is necessary in this market briefly explain your reasoning.