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.

---

Definitions:

Confederates

Individuals who are part of an experiment but pretend to be participants, often used to manipulate social interactions within the experiment.

Sociogram

A visual representation or diagram that maps the relationships and social interactions within a group.

Self-report Measures

Self-report measures are assessment tools where individuals provide subjective feedback about their own feelings, behaviors, or attitudes.

Covert Observational Measures

Covert observational measures refer to methods used in research to observe and gather data on subjects' behavior without them being aware of the observation, ensuring natural behavior is recorded.