[Solved] What Effect Does a Lump-Sum Profit Tax Have on a Monopolist

What are public utilities? A)Goods or services provided by private firms and sold directly to the public. B)Goods or services provided by private firms and sold to the government. C)Goods or services provided by the government and sold to private firms. D)Goods or services which are regarded as essential and which are therefore usually provided by the government.

The following graph shows the market demand and average cost curve for electricity (in millions of kilowatts)in an urban centre: -Refer to the above graph to answer this question.Suppose that the price is $3,and the market is served by a monopolist.What quantity will be sold,and what will be the total profit or loss? A)75 and $0. B)80 and $40. C)100 and $100. D)110 and $0. E)110 and $27.50.

The following graph shows the market demand and average cost curve for electricity (in millions of kilowatts)in an urban centre: -Refer to the above graph to answer this question.Suppose that the price is $3,and the market is served by two competing firms,each with average costs as shown in the graph and each having 50% of the market.What will be the quantity produced by each firm? A)50. B)55. C)75. D)100. E)110.

The following graph shows the market demand and average cost curve for electricity (in millions of kilowatts)in an urban centre: -Refer to the above graph to answer this question.Suppose that the price is $3,and the market is served by two competing firms,each having 50% of the market.What will be the profit or loss made by each firm? A)$0. B)Loss of $50. C)Loss of $100. D)Loss of $150. E)Profit of $100.

How do a monopoly lump-sum profits tax and a monopoly sales tax differ in their effects on the monopolist? A)A profit tax causes the price to rise,whereas the sales tax has no effect on the price. B)A profit tax causes the output to fall,whereas the sales tax has no effect on the output. C)A profit tax is totally paid by the monopolist,whereas a sales tax is partially passed on to consumers. D)A sales tax has no effect on neither the price nor the output. E)A sales tax has no effect on the monopolist's profit but a profit tax does.

What is meant by the term socially optimum price? A)The price which ensures that the firm is able to make normal profits only. B)The price which ensures that the firm is able to make economic profits only. C)The price which ensures that the output will be produced at the lowest possible cost. D)The price which ensures the best allocation of products. E)A price equal to average cost.

What is meant by the term fair-return price? A)The price which ensures that the firm is able to make normal profits only. B)The price which ensures that the firm is able to make economic profits only. C)The price which ensures that the output will be produced at the lowest possible cost. D)The price which ensures the best allocation of products. E)A price equal to marginal cost.

The following graph gives cost and revenue data for a monopolist: -Refer to the above graph to answer this question.If the monopolist is unregulated and wishes to maximize its total revenue,what will be its price and output? A)$0 and 80. B)$10 and 70. C)$10 and 140. D)$40 and 80. E)$45 and 70.

The following graph gives cost and revenue data for a monopolist: -Refer to the above graph to answer this question.If the monopolist is unregulated,what will be the level of its maximum total revenue? A)$80. B)$700. C)$1,400. D)$3,150. E)$3,200.

The following graph gives cost and revenue data for a monopolist: -Refer to the above graph to answer this question.If the monopolist is unregulated and is maximizing its total revenue,what will be the resulting total profit or loss? A)$0. B)Loss of $600. C)Loss of $2,400. D)Profit of $640. E)Profit of $2,400.