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182 Fighting the Diseases of PovertyFigure 5 Perfect market segmentationPPmaxP1P2P3SPminDQQIf a supplier has an element of market power (for example as a resultof the temporary market exclusivity conferred by a patent), then inprinciple he is able to set prices and will do so in such a way as tomaximise profits. The textbook economics analysis of such situationsassumes that the supplier will choose only one price, whichwill be higher than the marginal cost of production. However, if thesupplier is able to segment the market perfectly, then he will sell ata wide range of different prices to different consumers and willmaximise profits by setting the minimum price (Pmin) at which hesells just above the marginal cost of production and the maximumprice at Pmax. He will then sell total quantity Q, which is the sameas the perfectly competitive quantity. This is shown in Figure 5.