2. The market for EpiPens Consider the pharmaceutical company Mylan that produces epinephrine injection devices called EpiPens. In the presence of other firms producing substitutes for this good, the price of EpiPens is $150 Now suppose that competitors to Mylan no longer produce epinephrine injection devices, so Mylan now has pricing power in this market. As the economist on staff at Mylan, you are charged with the task of figuring out what your company's new pricing strategy should be The following graph shows the marginal cost (MC), which is assumed to be constant, and the average total cost (ATC) of Mylan. The graph also shows the demand curve (D) for EpiPens and the marginal revenue curve (MR) once the firm has market power. On the graph, use the grey point (star symbol) to indicate the quantity of EpiPens demanded if Mylan continues to charge $150. Dashed drop lines wilh automatically extend to both axes 1000 900 at $150 800 S 700 Profit Max ш600 500 e 400 ATC at Profit Max Y 300 ATCー 200 Profit MR 0 1 235 6 7 810 QUANTITY (Thousands of EpiPens) If Mylan continues to charge $150 per EpiPen, Mylan will earn negative ▼ economic profit. negativeCEO that total revenue will ncrease if she raises the price of EpiPens True or False: Given the demand curve for EpiPens, you shoul because the demand curve in this region is relatively inelastic. positive zero True False On the previous graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity. Dashed drop lines will automatically extend to both axes On the previous graph, use the purple point (diamond symbol) to indicate the average total cost at the profit-maximizing quantity. Then use the green rectangle (triangle symbols) to shade the area indicating the firm's economic profit Grade It Now Save & Continue Continue without saving