A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product: Q= 200-2P MR=100-Q TC=5Q MC=5

a) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output?

b) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price?

c) Suppose that a tax of $5 for each unit produced is imposed by state government. How much profit does the monopolist earn?

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Expert Solution

Rahul Sunny answered 1 year ago

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