If a Monopolist's Profits Were Taxed Away and Redistributed to Its

question 113

Multiple Choice

If a monopolist's profits were taxed away and redistributed to its consumers,

• A) inefficiency would remain because output would be lower than under competitive conditions.
• B) inefficiency would remain, but not because output would be lower than under competitive conditions.
• C) efficiency would be obtained because output would be increased to the competitive level.
• D) efficiency would be obtained because output would be increased and profits removed.