What happens when government levy tax

Reference no: EM1315091

A monopolist faces the following demand curve: P=120-0.02Q, where Q is production and P is price measured in cents per unit. The firm's cost function is given by C=60Q+25,000.

a) What is the level of production, price and total profits per week?

b) If the government decides to levy a tax of 14 cents per unit on the product, what would be the level of production, price, and profit?

Reference no: EM1315091

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