4. A pharmaceutical firm is marketing a patented drug it has developed(the firm therefore has monopoly rights over the drug). The demand forthe drug is given by Q = 8000 - 8P (MR(Q) = 1000 - ), where P is theprice of the drug (in cents), and the total cost of production is TC(Q) =Q2+100Q+10000 (MC(Q) = 2Q + 100).a. Calculate the (monopoly) price of the drug, PM, and the quantitysold, QMb. Suppose now that the drug's patent expires, and other pharmaceuticalfirms can begin producing it. Assume this result in a competitive supplyof the drug, and calculate the long-run competitive equilibrium price andaggregate quantity. Compare these to those you found in part a.

Answer is given below Explanation:

Answered: 4. A pharmaceutical firm is marketing a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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