Consider a monopolist who has a total cost curve of: TC = 7X + (1/2)X2.The market demand equation is X_d = 386 - (1/2)P.
A)What are the equilibrium quantity,equilibrium price,and profits in this market?
B)Suppose that a unit tax of $1 is placed on the monopolist.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
C)Suppose that the same unit tax of $1 is placed on consumers.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
D)What can be said about the taxes?

Question

Quizplus · Accepted Answer

The Answer of Consider a monopolist who has a total cost curve of: TC = 7X + (1/2)X2.The market demand equation is X_d = 386 - (1/2)P. A)What are the equilibrium quantity,equilibrium price,and profits in this market? B)Suppose that a unit tax of $1 is placed on the monopolist.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate? C)Suppose that the same unit tax of $1 is placed on consumers.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate? D)What can be said about the taxes?

Consider a Monopolist Who Has a Total Cost Curve Of