You are the chief economic advisor to the country of Utopia. Life is good in Utopia but people still suffer from the common cold and other ailments. The local Panacea Company has spent $1,000 developing a new drug called Nosnot that cures the common cold. They seek a patent that will prevent anyone else from selling Nosnot in Utopia (once they sell Nosot it is easily copied). It is estimated that the annual demand for Nosnot will be given by Q=12.5 – p/2 , and the marginal cost of production will be constant at $1. Utopia doesn’t yet have a patent system. You are asked to evaluate and rank 4 potential policies: 1) Do not grant any patent and allow any company to copy Nosot, 2) Grant a permanent patent to Panacea 3) Grant a patent for 20 years to Panacea, 4) Offer for the government to buy the rights to Nosnot from Panacea for $1,500. If your recommendation is adopted then similar future cases will be treated the same way.