The Diagram Below Shows the Demand Curve and Marginal Cost

question 58

Multiple Choice

The diagram below shows the demand curve and marginal cost and marginal revenue curves for a new heart medication for which the pharmaceutical firm holds a 20-year patent on its production and sales.This protection gives the firm monopoly power for the 20 years of the patent. FIGURE 10-6
-Refer to Figure 10-6.Suppose this pharmaceutical firm is charging a single price for its drug and is maximizing its profits.If it then begins to perfectly price discriminate among its buyers it will

• A)cause a loss of economic surplus to society as a whole.
• B)capture consumer surplus equal to areas D + E + C + F + H.
• C)no longer be equating MR and MC.
• D)reduce its producer surplus by areas C + F + H.
• E)decrease its total output.

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Mean

An average of a set of numbers, calculated by dividing the sum of all the values by the number of values.

Z Score

A numerical calculation indicating how a specific value's distance from the group's average is expressed in multiple standard deviations.

Mean

The arithmetic average of a set of numbers, calculated by adding them all up and dividing by the quantity of numbers.

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A score that expresses an individual's position relative to the mean, based on the standard deviation of the scores in the distribution.