Behavioural economics – Monopoly, patents and loss of consumer surplus regarding pharmaceutical companies The intuition of monopoly and of patents as a ‘temporary monopoly’ for drug companies to make their profits back Discuss the inefficiency of monopoly in terms of loss of consumer surplus by using a diagram in order to argue that from a static perspective awarding patents as a reward for successful innovation is not the most efficient reward. Welfare effects of monopoly: Describe the diagram and apply any other relevant diagrams