Use the Figure Below to Answer the Following Questions

question 19

Multiple Choice

Use the figure below to answer the following questions. Figure 12.4.6
-Prime Pharmaceuticals has developed a new asthma inhaler,for which it has a patent.An inhaler can be produced at a constant marginal cost of $2 per inhaler.The demand curve,marginal revenue curve,and marginal cost curve for this new asthma inhaler are shown in Figure 12.4.6.The patent gives Prime Pharmaceuticals a monopoly for its new inhaler.If Prime Pharmaceuticals can perfectly price discriminate,deadweight loss is

• A)$16 million.
• B)zero.
• C)$32 million.
• D)$64 million.
• E)$24 million.

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Definitions:

Gain on Sale

The financial profit realized from the sale of an asset, which exceeds its purchase price.

Available-for-Sale Securities

Financial assets that are not classified as held-to-maturity or trading securities, and can be sold in the short-term to meet liquidity needs.

Security Investments

Investments in tradable financial assets such as stocks, bonds, or other securities aiming for capital appreciation or income generation.

Fair Value

An estimation of the price at which an asset would change hands between willing parties, neither under compulsion to buy nor sell, and both having reasonable knowledge of relevant facts.