Consider a Monopolist Who Has a Total Cost Curve Of

question 10

Essay

Consider a monopolist who has a total cost curve of: TC=7X+(1/2)X2.The market demand equation is Xd=386-(1/2)P.
A)What are the equilibrium quantity,equilibrium price,and profits in this market?
B)Suppose that a unit tax of $1 is placed on the monopolist.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
C)Suppose that the same unit tax of $1 is placed on consumers.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
D)What can be said about the taxes?

• A)What are the equilibrium quantity,equilibrium price,and profits in this market?
• B)Suppose that a unit tax of $1 is placed on the monopolist.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
• C)Suppose that the same unit tax of $1 is placed on consumers.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
• D)What can be said about the taxes?

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Definitions:

Compounds

Substances composed of two or more elements chemically combined in fixed proportions, can be broken down into simpler substances.

Saquinavir

An antiretroviral drug used in the treatment of HIV infection, acting as a protease inhibitor to interfere with viral replication.

HIV Protease Inhibitor

A class of antiviral drugs used in the treatment of HIV/AIDS, which work by blocking the HIV protease enzyme, essential for the virus’s replication.

Functional Group

An atom or group of atoms within a molecule that has a characteristic physical and chemical behavior.