Consider a Monopolist That Is Earning Profits in the Long

question 100

Multiple Choice

Consider a monopolist that is earning profits in the long run.If the government imposes a lump- sum tax on this monopolist (that is less than its profits) ,then

• A)output would decrease and price to consumers would increase.
• B)new firms would enter the industry.
• C)neither output nor price would change.
• D)the monopolist would cease production.
• E)the output would remain the same while price increased.

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