One way to deal with the efficiency problem of monopolies is to tax the profits of monopolists.

Name: One way to deal with the efficiency problem of monopolies is to tax the profits of monopolists.
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Question

Quizplus · Accepted Answer

Taxing the profits of monopolists does not address the efficiency problem, as it does not change the monopolist's incentive to produce at a socially optimal level. Instead, it may reduce the monopolist's incentive to invest or innovate.

One Way to Deal with the Efficiency Problem of Monopolies