Consider a Monopolist Who Has a Total Cost Curve Of

question 3

Essay

Consider a monopolist who has a total cost curve of: TC = 7X + (1/2)X2.The market demand equation is X_d = 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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