-The Above Figure Shows the Demand and Cost Curves Facing

question 74

Multiple Choice

-The above figure shows the demand and cost curves facing a monopoly.If a $100 per unit tax is charged,the loss in welfare resulting from the tax is

• A) $250.
• B) $312.50.
• C) $1,250.
• D) $1,562.50.

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Definitions:

Unit-elastic

Unit-elastic describes a situation where a change in price leads to an equivalent proportional change in quantity demanded or supplied, resulting in no revenue change for the seller.

Wage Increase

An upward adjustment in the amount of earnings a worker receives for their labor.

Elasticity of Resource Demand

A measure of how the quantity demanded of a resource changes in response to a change in price.

Resource Prices

The cost of inputs used in the production of goods and services, such as labor, capital, land, and raw materials.