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Figure 12.4.4 Refer to Figure 12.4.4, which shows the market for Prim...

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A graph plots price (Dollar per unit) versus Quantity (millions of inhalers). In the graph, the horizontal axis ranges from 0 to 20 with an increment of 4 units. The vertical axis ranges from 0 to 10 with an increment of 1 unit. The graph plots two slopes from top left to mid-bottom and bottom-right respectively, a horizontal line from (0, 2) to (20, 2) labeled M C, and four open points (8, 2), (8, 6), (10, 5) and (16, 2). The first slope that falls through (0, 10) to (10, 0) is labeled M R, and the second slope falls through (0, 10) to (20, 0) labeled D.

Figure 12.4.4

Refer to Figure 12.4.4, which shows the market for Prime Pharmaceuticals' inhalers, for which it has a patent. Prime's marginal cost is constant at $2 an inhaler. If Prime Pharmaceuticals can perfectly price discriminate, how much producer surplus will Prime create?

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