Problem
A monopoly drug company produces a lifesaving medicine at a constant cost of $10 per dose. The demand for this medicine is perfectly inelastic at prices less than or equal to the $100 (per day) income of the 100 patients who need to take this drug daily. At a higher price, nothing is bought. Show the equilibrium price and quantity and the consumer and producer surplus in a graph. Now the government imposes a price ceiling of $30. Show how the equilibrium, consumer surplus, and producer surplus change. What is the deadweight loss, if any, from this price control?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.