Consider a Monopolist That Is Earning Profits in the Long

question 27

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

---

Definitions:

Benefits

Refers to the advantages or positive outcomes derived from a particular action, policy, or product.

Information Derived

Information derived means the knowledge or data obtained as a result of processing, analyzing or interpreting original data sources.

Management Accountant

A professional who focuses on providing financial data and analysis to managers for decision-making purposes.

Interdepartmental Communications

The exchange of information and collaboration between different departments within an organization.