Government imposes a ceilingprice of the firms product

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Reference no: EM1313224

Q. A monopolist faces the subsequent demand function for its product: Q = 45 - 5P

The fixed costs of the monopolist are $12 also the monopolist incurs variable costs of $5.00 per unit.

a) Illustrate what is the profit-maximizing level of price also quantity for this monopolist? Illustrate what will profits be at this price also output level?

b) If the government imposes a franchise tax on the firm of $10, Illustrate what will be the profit-maximizing level of price, output also profits?

c) If the government imposes an excise tax of 50 cents per unit of output sold, Illustrate what is the impact on the profit-maximizing level of price, outputs also profits?

d) If the government imposes a ceiling of $6 on the price of the firm's product, Illustrate what output will the firm produce also Illustrate what will be total profits?

Reference no: EM1313224

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